New-home construction plunges in February

By The Associated Press

The Associated Press

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WASHINGTON — 

Builders broke ground last month on the fewest homes in nearly two years and cut their requests for permits to start new projects to a five-decade low. The decline in construction activity is the latest evidence that the housing industry is years away from a recovery.
Home construction plunged 22.5 percent in February from January to a seasonally adjusted 479,000 homes, the Commerce Department said Wednesday. It was the lowest level since April 2009 and the second-lowest on records dating back more than a half-century.
The decline followed a surge in highly volatile apartment construction in January, which pushed the overall construction rate up to more than 600,000 units - the fastest rate in 20 months. Still, the building pace has been far below the 1.2 million units a year that economists consider healthy.
Single-family homes, which make up roughly 80 percent of home construction, fell 11.8 percent in February. Apartment and condominium construction dropped 47 percent, reversing much of January's gains.
Building permits, an indicator of future construction, fell 8.1 percent last month to the lowest level on records dating back to 1960. Permit requests for single-family homes saw the biggest decline. Apartments and condos remained flat.
Falling prices, sluggish sales and the weak construction rate all point to a housing market that is "stuck at a bottom of a steep hill," according to Moody's Analytics Economic Research.
"There are really large structural problems with the housing market," said Dan Greenhaus, chief economic strategist with Miller Tabak + Co. "This is not a run-up in oil prices. This is a multiyear build up in the housing market that is going to take more than several months or several quarters to get through."
For a housing recovery to take hold, the job market needs to improve and builders need to gain access to hard-to-get credit.
"Credit is flowing freely to large companies but not so much to the small builders," said Patrick Newport, U.S. economist for IHS Global Insight. "If builders cannot get financing to build new homes, housing will remain in the dumps."
Analysts said year-end building code changes in California, Pennsylvania and New York caused an artificial spike for permit requests in December and housing starts in January. Builders in those states rushed to file new permits before those changes went into effect.
Even with those gains, the housing market has struggled. Millions of foreclosures have forced home prices down and more are expected this year. Tight credit has made mortgage loans tough to come by. And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further.
The drop in home construction activity was felt coast to coast. It fell 48.6 percent in the Midwest, 37.5 percent in the Northeast, 28 percent in the West and 6.3 percent in the South.
The volatile housing market is weighing on the overall economic recovery. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
The trade group said Tuesday that its index of industry sentiment for March improved slightly to 17. That was the first gain in five months after four straight readings of 16. Still, any reading below 50 indicates negative sentiment about the housing market's future. The index hasn't been above that level since April 2006.

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Underwater mortgages rise as home prices fall

By DEREK KRAVITZ

AP Real Estate Writer

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WASHINGTON — 

The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.
About 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter, according to report released Tuesday by housing data firm CoreLogic. That's up from 22.5 percent, or 10.8 million households, in the July-September quarter.

The number of underwater mortgages had fallen in the previous three quarters. But that was mostly because more homes had fallen into foreclosure.  Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.

Roughly two-thirds of homeowners in Nevada with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with up to 50 percent of homeowners with mortgages in those states underwater.

Oklahoma had the smallest percentage of underwater homeowners in the October-December quarter, at 5.8 percent. Only nine states recorded percentages less than 10 percent.  In addition to the more than 11 million households that are underwater, another 2.4 million homeowners are nearing that point.

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Reverse mortgages get more affordable, but be careful

By MARCIE GEFFNER

Bankrate.com

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Before you borrow

IF YOU'RE in the market for a reverse mortgage, seek independent counseling before you even talk to a lender to learn about loan alternatives or tips on negotiating with a lender. Find a government-approved counselor near you at www.hud.gov/.

CHECK OUT the National Council on Aging's BenefitsCheckUp.org for assistance programs that could make a reverse mortgage unnecessary.

TO FIND OUT how much you can potentially receive through a reverse mortgage, check online calculators at aarp.org or reversemortgage.org.

CONSUMERS UNION offers tips about reverse mortgages on its website, www.consumersunion.org. The site's offerings include information about applying for government benefits for seniors, getting advice from local Housing and Urban Development counselors and seeking a so-called private reverse mortgage — a loan from a family member using the senior's home equity as collateral.

These loans, which allow seniors to spend their home equity without selling their home, have historically been cumbersome and expensive. But new options empower seniors to tap smaller amounts of equity in a more affordable way, according to Peter Bell, president of the National Reverse Mortgage Lenders Association, a group that represents lenders and investors.

The biggest change is the introduction of a new reverse mortgage, called the Home Equity Conversion Mortgage Saver option, or HECM Saver. It has a cheaper upfront mortgage insurance premium, or MIP, compared with the traditional HECM reverse mortgage, now known as the standard option.
Mortgage insurance protects lenders from loan losses, though borrowers pay the cost. Most reverse mortgages are insured through the Federal Housing Administration.

The trade-off, due to the lower MIP and other program changes, is a 10 percent to 18 percent reduction in the maximum loan amount allowed on the saver option, and 1 percent to 5 percent on the standard option, depending on the borrower's age and interest rate, Bell says. The lower loan amount allowed on the saver option means the FHA's risk exposure is lessened.

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New-home sales in January drop 12.6 pct

By DEREK KRAVITZ

AP Real Estate Writer

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WASHINGTON — 

Sales of new homes fell significantly in January, a dismal sign after the worst year for that sector in nearly a half-century.
New-home sales dropped to a seasonally adjusted rate of 284,000 homes last month, the Commerce Department said Thursday. That's down from 325,000 in December and less than half the 600,000-a-year pace that economists view as healthy.
Bad winter weather likely hampered some sales, although the industry has been struggling since the housing bubble burst in 2006.
Last year was the fifth consecutive year that new-home sales have declined after hitting record highs during the housing boom. Buyers purchased 322,000 new homes last year, the fewest annual total on records going back 47 years. Economists say it could take years before sales return to a healthy pace.
Builders of new homes are struggling to compete in markets saturated with foreclosures. High unemployment and uncertainty over home prices have kept many potential buyers from making purchases.
Poor sales of new homes mean fewer jobs in the construction industry, which normally powers economic recoveries. On average, each new home built creates the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
New-home sales were uneven across the country. In January, sales fell 36.5 percent in the West and 12.8 percent in the South. But they rose 17.1 percent in the Midwest and 54.5 percent in the Northeast.
The big declines in the West came after a huge increase in December. Buyers had rushed to take advantage of a state tax credit of up to $10,000 on new home purchases in California at the end of the month, said Joshua Shapiro, chief U.S. economist for MFR Inc.
"It would make sense that a surge in such activity took place in California during December and there was payback in January," he said.
Sales of previously occupied homes have not fared much better. While sales rose slightly last month, the seasonally adjusted annual pace of 5.36 million is still far below the 6 million homes a year needed to maintain a healthy market.
Mortgage applications are now near their lowest levels in 15 years.
The average rate on a 30-year fixed mortgage this week dipped to 4.95 percent from 5 percent, Freddie Mac said Thursday. It hit a 40-year low of 4.17 percent in November, and has been trending upward since.
About 188,000 new homes were for sale at the end of January, the lowest level since 1967. The number of homes that have received permits to begin construction has held steady over the past year while the number of those under construction and finished has plummeted.
The median sales price of a new home sold in January was $230,600, down 1.9 percent from the month before. Given the pace of new-home sales, it would take nearly 8 months to clear them off the market. Economists say a six-month supply of homes is healthy.

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Investors snap up cheap homes, new buyers miss out

By DEREK KRAVITZ

AP Real Estate Writer

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WASHINGTON — 

Home sales are starting to tick up after the worst year in more than a decade. But the momentum is coming from cash-rich investors who are scooping up foreclosed properties at bargain prices, not first-time home-buyers who are critical for a housing recovery.
The number of first-time buyers fell last month to the lowest percentage in nearly two years, while all-cash deals have doubled and now account for one-third of sales.
A record number of foreclosures have forced home prices down in most markets. The median sales price for a home fell last month to its lowest level in nearly nine years, according to the National Association of Realtors.
Lower prices would normally be good for first-time home-buyers. But tighter lending standards have kept many from taking advantage of them. With fewer new buyers shopping, potential repeat buyers are hesitant to put their homes on the market and upgrade.
Cash-only investors are most interested in properties at risk of foreclosure. They can get those at bargain-basement prices.
"The cash-rich investors can come in and get foreclosed properties at incredibly favorable prices," said Paul Dales, senior U.S. economist for Capital Economics. "The average Joe can't take advantage because they simply cannot get the credit to buy."
Sales of previously occupied homes rose slightly in January to a seasonally adjusted annual rate of 5.36 million, the Realtors group said Wednesday. That's up 2.7 percent from 5.22 million in December.
Still, the pace remains far below the 6 million homes a year that economists say represents a healthy market. And the number of first-time home-buyers fell to 29 percent of the market - the lowest percentage of the market in nearly two years. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.
Foreclosures represented 37 percent of sales in January. All-cash transactions accounted for 32 percent of home sales - twice the rate from two years ago, when the trade group began tracking these deals on a monthly basis. In places like Las Vegas and Miami, cash deals represent about half of sales.
In the three states where foreclosures are highest, at-risk homes make up at least two-thirds of all sales. In Florida, 63 percent of sales in January involved homes that were at risk of foreclosure, according to a Campbell/Inside Mortgage Finance survey. And in Arizona and Nevada, a combined 72 percent of sales involved those homes at risk of foreclosure.
A major barrier for first-time home-buyers is tighter lending standards adopted since the housing bubble burst. These have made mortgage loans tougher to acquire. Banks are also requiring buyers put down a larger down payment. During the housing boom, buyers could purchase a home with little or no money down.
The median down payment rose to 22 percent last year in at least nine major U.S. cities, according to a survey by Zillow.com, a real estate data firm. That's up from 4 percent in late 2006 - as the housing bubble began to burst. The cities included some of the nation's hardest hit markets - Las Vegas, Phoenix and Tampa, Fla. - as well as areas that are rebounding, including San Diego and San Francisco.
That has prevented many from buying, even when the median price of a home fell in January to $158,800. That's a decline of 3.7 percent from a year ago and the lowest point since April 2002.
"If you can get the financing, it's a great time to buy a home with prices this low," said Patrick Newport, U.S. economist with IHS Global Insight.
Many potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further. High unemployment is also deterring buyers. Job growth, while expected to pick up this year, will not likely raise home sales to healthier levels.
With mortgage rates rising, mortgage applications have been volatile. They're now near their lowest levels in 15 years. Economists say it could take years for home sales to return to healthy levels.
"Home prices continue to languish," said Steven Wood, chief economist for Insight Economics. "Any recovery will be difficult to sustain given the still-large supplies of homes for sale and distressed properties."
Last year, home sales fell to 4.9 million, the lowest level in 13 years. And even that number, some say, was overstated.
CoreLogic, a real-estate data firm in Santa Ana, Calif., said it's found that 3.3 million homes were sold last year, far fewer than the National Association of Realtors' 4.9 million figure. CoreLogic has suggested that the Realtors figure is too high.
Since 1968, the Realtors group has produced the monthly report on the number of previously occupied homes sold. The group serves as chief advocate and lobbying arm for real estate agents. It says it's reviewing its 2010 yearly estimate.
One obstacle to a housing recovery is the glut of unsold homes on the market. Those numbers fell to 3.38 million units in January. It would take 7.6 months to clear them off the market at the January sales pace. Most analysts say a six-month supply represents a healthy supply of homes.
Analysts said the situation is much worse when the "shadow inventory" of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.
For January, sales were up in three of the four regions of the country led by an 7.9 percent rise in the West. Sales rose 3.6 percent in the South, 1.8 percent in the Midwest and down 4.6 percent in the Northeast.
The January increase was driven by a 2.4 percent rise in sales of single-family homes. It pushed activity in this area to an annual rate of 4.69 million units. Sales of condominiums rose 4.7 percent to a rate of 670,000 units.

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Risk of foreclosure dips, but remains elevated

By JANNA HERRON

AP Real Estate Writer

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NEW YORK —

Fewer Americans fell behind on their mortgage payments in the final three months of last year, but foreclosures are still rising.
The Mortgage Bankers Association said Thursday 8.2 percent of homeowners missed at least one mortgage payment in the October-December quarter. The figure, which is adjusted for seasonal factors, improved from 9.1 percent in the previous quarter and from a high of more than 10 percent in the January-March quarter.
The worst delinquency rates were in Mississippi at 13.3 percent, Nevada at 12 percent and Georgia at 11.9 percent.  The percentage of homes in the foreclosure process rose to 4.6 percent from 4.4 percent, tying an all-time high for the survey. Foreclosures are expected to peak this year as 5 million troubled loans move through the process. Florida and Nevada had the highest percentage of homes in the foreclosure process at 14.2 percent and 10.1 percent.
California and Florida make up more than a third of all loans in foreclosure, which is down from nearly 40 percent a year earlier. Still, Florida's foreclosure crisis is one of the most pronounced in the country. Almost a quarter of Florida homeowners with a loan are behind on their payments or in the foreclosure process, the worst rate in the nation.
Typically, the percentage of seriously delinquent borrowers - those more than 90 days behind on their mortgages or in foreclosure - is just above 1 percent. In the fourth quarter, that figure was 8.57 percent.
An improving job market is behind the decline in the delinquency rate, said MBA Chief Economist Jay Brinkmann. He noted that the private sector added 1.2 million jobs last year and the number of people applying for unemployment benefits started to fall in the fourth quarter.  "It's a sign we've turned a corner, that's the good news," Brinkmann said. "The bad news is loans in foreclosure are still very high."
Foreclosures dipped in the July-September quarter as lenders addressed allegations of improper paperwork during the foreclosure process. But by the final three months of last year, many had resumed taking back homes.  Banks are on track to repossess more than 1 million homes this year, the most since the housing meltdown began, according to foreclosure tracker RealtyTrac Inc. That will drive home prices down because foreclosures are sold at deep discounts.
The foreclosure crisis started years ago when borrowers took out risky loans with adjustable interest rates that they couldn't afford. Many also qualified for loans without providing proof of income. The pain spread to homeowners with good credit who took out safe, fixed-rate mortgages, but are struggling in a weak economy.

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Just for laughs

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Try to Resist the Temptation to Over Improve

You have received some extra money! You want to remodel! If you are planning a major renovation, take a few sensible precautions before having plans drawn up and signing on the contractor's dotted line.

Any time you do any significant remodeling, you run the risk of over-improving your home. Please call or send an email if you are interested in a market analysis of what your home is currently worth. We can talk about neighborhood trends and discuss the recent sales of homes in your area.

If your neighborhood is experiencing healthy appreciation, making major changes to your home might make sense. However, if there is not much difference between the prices of remodeled homes and those which have not been renovated, expensive changes may be hard to recover if you sell your home soon. Please call or send an email to get help deciding if remodeling and renovations are in your best interest.  grover@grovernet.com

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Debt could be a deal-breaker

By Kenneth R. Harney
Syndicated columnist

WASHINGTON — One loan officer describes it as a "financial colonoscopy" on your credit, and he suggests anybody applying for a mortgage be prepared for it.  What he's talking about is the combined effect of new credit-transparency standards imposed on lenders by mortgage giants Freddie Mac and Fannie Mae.

As of Feb. 1, Freddie Mac began requiring lenders to dig back 120 days into your credit-bureau files to detect any "inquiries" — signs of your applying for credit anywhere else — then to check out whether any applications were approved. If they resulted in significant new debts, your mortgage deal could be affected and your lender might have to revise the terms or the rate you're being offered.

Meanwhile, Fannie Mae is requiring lenders to track or review your credit behavior after you've been approved for a mortgage but haven't yet gone to closing. That period often extends for 60 days or more. If inquiries pop up on your files during this time, lenders must determine whether any new debt might require a re-underwriting of the originally quoted terms.

For example, if the mortgage quote is tied to specific debt-to-income ratio maximums — say 31 percent of monthly income for housing, 43 percent for total household debt — a new credit-card account with a $5,000 balance might require a new underwriting or even a higher rate.

If the new card account shows up late in the game — a day or two before closing, with moving vans on the way — you could face some serious problems.

"We now tell our customers that they need to be ready" for much more rigorous screening of their credit, said Matt Jolivette of Associated Mortgage Group in Portland, who made the reference to a "financial colonoscopy."

"They (Fannie and Freddie) want to know everything." This means full disclosure on any credit accounts, big or small, that consumers have shopped for in the months immediately preceding and following their application.

"Our advice is this: Don't buy cars, don't buy furniture or appliances on credit until we close," said Jolivette. "You don't own the house yet, so don't buy anything for it" unless you pay in cash.
The stricter credit-scrutiny rules from Freddie and Fannie have stimulated an explosion of new services and products to help lenders keep track of their mortgage clients' behavior.

For example, Experian, one of the three national credit bureaus, sells a "risk and retention triggers" system that functions much like the anti-identity theft services it markets directly to consumers. Lenders can choose from a detailed menu of trigger-event occurrences from the application date to the closing date. These include all new inquiries for credit cards, retail credit accounts, auto loans and even "over-limit" features they apply for on existing accounts. The monitoring is 24/7.

Equifax, another of the big three credit bureaus, offers a similar service called "Undisclosed Debt Monitoring." Steve Meirink, an Equifax vice president, said that because of Fannie and Freddie rule changes, there has been "a tremendous response" from banks and mortgage companies to sign up for its program.

Other players in the credit industry offer mortgage lenders customized "refresh" pulls of files and scores that compare a borrower's data at the application and just before the scheduled closing.
Marty Flynn, president of Credit Communications of San Ramon, Calif., urges clients to pull "triple merged" files from all three bureaus — TransUnion along with Experian and Equifax — because information on file can differ from bureau to bureau.

Freddie Mac's new 120-day look-back rule is designed to turn up situations where homebuyers apply for credit a couple of months before seeking a mortgage but the inquiry and new account haven't hit the national bureau files because of differing reporting schedules followed by creditors.

By scanning back 120 days — the previous standard was 90 days — virtually all inquiries made during the four months preceding the application should show up. If they're not caught then, they are certain to be identified during the scans or refresher reports obtained before closing.

The bottom line on all this: Be aware that more than ever, your credit files, not just your FICO scores, are likely being checked, rechecked and evaluated for the third of a year preceding a mortgage application and two to three months before closing.

The cleaner and simpler you keep the files, the easier your path to an on-time, uncomplicated closing should be.

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Rate on 30-year fixed mortgage rises to 4.81 pct.

The average rate on the 30-year fixed mortgage edged up this week as bond yields increased.

By JANNA HERRON

AP Business Writer

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NEW YORK —

The average rate on the 30-year fixed mortgage edged up this week as bond yields increased.
Freddie Mac said Thursday the average rate rose to 4.81 percent this week from 4.80 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.08 percent from 4.09 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Rates have been little changed this year after spiking more than half a percentage point in the last two months of 2010. Investors sold off Treasury bonds during that time, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
High foreclosures, job worries and expectations that home prices will fall further have kept many potential homebuyers on the sidelines. Historically low mortgage rates haven't been enough to jumpstart the housing market.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage fell to 3.69 percent from 3.70 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on one-year adjustable-rate home loans was unchanged at 3.26 percent.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year and 15-year loan in Freddie Mac's survey was 0.8 point. The average fee for the five-year ARM was 0.7 point, and the fee for the 1-year ARM was 0.6 point.

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December signed contracts for homes up 2 percent

The number of people who signed contracts to buy homes rose in December, marking the fifth increase in the past six months.

By MARTIN CRUTSINGER,

AP Economics Writer

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WASHINGTON — 

The number of people who signed contracts to buy homes rose in December, marking the fifth increase in the past six months.

The National Association of Realtors said Thursday that its index of sales agreements for previously occupied homes rose 2 percent last month. The index had posted a 3.1 percent increase in November.
Economists have cautioned that a big reason for the jump is that people are buying foreclosed homes. Still, the increase is likely to give the weak housing market a boost in the first few months of the year. That's because there's usually a one- to two-month lag between a sales contract and a completed deal.

The number of Americans who bought previously owned homes last year fell to the lowest level in 13 years, and economists say it will be years before the housing market fully recovers.
High unemployment and a record number of foreclosures are deterring potential buyers who fear home prices haven't reached the bottom. Job growth is expected to pick up this year, but not enough to raise home sales to healthier levels.

Contract signings in December were up in every region of the country except the West.  The gains were led by an 11.5 percent increase in the South. Signings were up 8 percent in the Midwest and 1.8 percent in the Northeast. However, they fell 13.2 percent in the West.

With the recent increases, contract signings are 24.1 percent above their low point in June. In that month, signings fell to the lowest level since the Realtors began tracking signed contracts in 2001.
Even with the gain in December, signings are 4.2 percent below where they were in December 2009.  At the end of 2009, the housing market got a boost as buyers rushed to close deals to take advantage of a federal home-buying tax credit that initially was set to expire in November.  The tax credit was later extended to April 30. After it expired, housing activity slumped.

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Home prices fall in major U.S. cities, including Seattle, in November

Home prices are falling across most of America's largest cities, and average prices in nine major markets, including Seattle, have hit their lowest point since the housing bust.

By ALEX VEIGA, The Associated Press

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Home prices are falling across most of America's largest cities, and average prices in nine major markets, including Seattle, have hit their lowest point since the housing bust.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 1 percent in November from October. All but one city, San Diego, recorded monthly price declines.
Nine others sank to their lowest levels since prices peaked in 2006 and 2007: In addition to Seattle, they were Atlanta; Charlotte, N.C.; Chicago, Las Vegas; Miami; Portland; Tampa, Fla.; and Detroit, which saw the largest drop at 2.7 percent from the previous month.
In the Seattle metropolitan area, which includes King, Snohomish and Pierce counties, average prices fell 1.1 percent between October and November, according to Case-Shiller.
Millions of foreclosures are forcing prices down, and many people are holding off making purchases because they fear the market hasn't hit bottom yet. Many analysts expect home prices to keep falling through the first six months of this year.  "With these numbers, more analysts will be calling for a double-dip in home prices," said David Blitzer, chairman of S&P's Index Committee.
Over the past year, prices have risen in four major metro areas. Prices rose 3.5 percent in Washington, the largest gain. Los Angeles, San Diego and San Francisco also posted gains.
Seattle prices were down 4.7 percent year-over-year.
Some of the worst declines have come in cities hard hit by foreclosures.
As of November, average home prices in Las Vegas have fallen 57.2 percent from their peak in August 2006 and are back to where they were in late 1999. Another foreclosure hotbed, Phoenix, is down 53.9 percent from its June 2006 peak. Average home prices there are back to where they were in 2000. Miami has fallen 48.8 percent from its peak in December 2006, and is selling at late 2002 levels.  Seattle average home prices peaked later, in July 2007, and have since fallen 26.4 percent. The last time they were lower was in February 2005, according to Case-Shiller.  The 20-city index has risen 3.3 percent from its April 2009 bottom. But it remains well below its July 2006 peak.

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Neighborhood of the week: Sammamish Plateau

Sammamish Plateau can feel like two worlds in one -- a modern suburb in a rural setting that has garnered national attention, and a place where home values have held up over the past year.

By Jolene Gensheimer

COURTNEY BLETHEN RIFFKIN / THE SEATTLE TIMES

Homes and tall trees line the shore of Pine Lake on the Sammamish Plateau, providing a peaceful setting in a fast-growing area.

COURTNEY BLETHEN RIFFKIN / THE SEATTLE TIMES

The traffic and stores along busy 228th Avenue Northeast in the city of Sammamish contrasts with the rural feeling that remains in much of the area.

CHAD ZOTTOLI / WINDERMERE REAL ESTATE

This four-bedroom, 2.5 bath, 2,560-square-foot house on the Sammamish Plateau recently sold for $705,000. It has panoramic views and a large family room that opens onto nearly 500 square feet of deck. Chef's kitchen has slab-granite countertops.

RENEE VANOUS / WINDERMERE REAL ESTATE

This five-bedroom, 2.75 bath, 3,750-square-foot house on the Sammamish Plateau recently sold for $670,000. It features a two-story entry with curved staircase, vaulted ceilings and three fireplaces. Gourmet kitchen has hardwood floors and walk-in pantry.

Related

Sammamish Plateau

Population: 46,246 (city of Sammamish 2010 estimate)

Distance to downtown Seattle: About 18 miles.

Schools: Residents of the Sammamish Plateau are served by either the Issaquah or Lake Washington school districts.
Recreation: Pine Lake Park, 228th Avenue Southeast and Southeast 24th Street. Offers swimming, boat launch, fishing pier and two new play areas. The park is host to community events, including the annual Summer Nights At The Park series of music concerts, plays and outdoor movies.
Fun fact: Sammamish High School is actually in Bellevue and served by the Bellevue School District. The school opened in 1959, 40 years before the city of Sammamish was created.
Perched above Lake Sammamish on the edge of the Cascade foothills, the Sammamish Plateau appears to be a peaceful, forested retreat just minutes from Bellevue, Redmond and Seattle.
But the last 30 years have seen sweeping changes to the Plateau. When Janell Focht moved there in 1981, Sadlier's Country Store was a favorite local gathering place. There was still a hitching post and Focht saw horses tied up outside along with the cars.  But Sadlier's closed in 1984 and today the site is home to a restaurant near a new, busy four-lane roadway in the fast-growing city of Sammamish, which was incorporated in 1999.  While Focht has fond memories of the country store and rural feeling of the area, she says most of the change is good.  She used to have to drive all the way down to Redmond for groceries or gas. And the widening and improvements to the roads have eased traffic considerably, too, she says. "It is a beautiful place to live," says Focht. "We are still pretty small town, even though we have grown."
Home values have remained relatively stable over the past year, according to figures compiled by Seattle-based Zillow.com. The median value of all single-family houses in Sammamish, not just those that recently sold, was $512,600 in November, down 1.1 percent year-over-year, the Zillow Home Value Index shows. That compares to a drop of 11.3 percent for single-family houses in the Seattle metro area, according to Zillow.  Meanwhile, the median value of all condos in Sammamish was $223,500 in November, down 8.5 percent year-over-year, according to Zillow.
At times, the Plateau feels like two worlds melded together by its geography. Some parts of the Plateau look like a scenic country drive dotted with large estates and farm-style homes on acreage with horses, and many residents report seeing deer, raccoons, bobcats, and even the occasional bear. Other areas have been developed into denser suburban neighborhoods with plenty of amenities, such as stores, businesses and parks. In fact, residents say it is the amenities that set the area apart and make it a unique place to live.

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Relaxed FHA 'flip' rules prove no flop

By Kenneth R. Harney

Syndicated columnist

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WASHINGTON — When you hear the Obama administration plans to extend a policy that allows low down-payment financing of "flipped" houses for 2011, your first reaction might be: no way.  At this stage of the boom-to-bust-to-recovery cycle, is high-leverage flipping the type of activity the federal government should be encouraging?
Definitely not. A classic flip involves the quick resale of a house or condominium at a significantly higher price than the purchaser paid, with only cosmetic improvements to the property if any at all. Sometimes only the contract itself is being signed over to a new buyer at a higher price.
A transaction in Florida last year illustrates the concept: An investor bought 19 condo units in a financially distressed Miami development for $1.25 million. She closed on the deal then resold the units barely 20 minutes later to another investor for $1.45 million for a $200,000 instant profit.
"That was a pretty impressive flip, even for this market," says Peter Zalewski, founder of Condo Vultures, a firm that tracks condo activity in the Miami area and advises investors.  The Obama administration plan has no connection with deals like these, though the word "flipping" is in its title.
A little history: For years, the federal government had prohibited the use of FHA mortgage financing by buyers purchasing homes from sellers who had owned the property for less than 90 days. The idea was to prevent speculators from defrauding the government through quick flips of houses — usually involving straw buyers and corrupt appraisers — at wildly inflated prices.
One side effect of that policy had been to stifle purchase-and-renovate projects by legitimate, small-scale investors who buy houses after foreclosure or loan defaults then resell them in substantially improved condition.
In many parts of the country, first-time and moderate-income buyers often sought to buy these fixed-up houses using FHA-insured mortgages with 3.5 percent down payments, but were prevented from doing so by the long-standing "anti-flipping" rules.
This, in turn, left large numbers of foreclosed, vacant houses sitting unsold and deteriorating, with negative effects on the values of neighboring properties.
Last January, FHA Commissioner David H. Stevens announced a one-year suspension of that rule, permitting qualified buyers to obtain FHA mortgages on properties acquired by rehabbers less than 90 days before.
The plan, to expire at the end of this month, came with key safeguards for purchasers, including inspections and multiple appraisals in some cases to document the amounts spent by investors on the improvements.
Vicki Bott, the deputy assistant secretary for single-family housing at FHA, confirmed the agency expects to continue the policy for another year, and hopes to make a formal announcement soon.
Not only have first-time buyers responded overwhelmingly to the opportunity to buy "turnkey" renovated homes with low down payments, she said, but they have performed well on their mortgage obligations.
"Obviously we have concerns about flipping in general," Bott said, but FHA has seen none of the fraud problems, defaults and re-foreclosures that cost the agency millions in insurance payouts in earlier years.
The challenge for first-time buyers, she added, "is that they often don't have the money to do repairs — even replacing the carpet can be a hardship. So when you can bring in investors" who will do the renovations before resale, "it makes a huge difference."
What do investors themselves think about the relaxation of FHA's anti-flip rules? Not surprisingly, they tend to be enthusiastic.
Paul Wylie, who with a group of partners and contractors specializes in acquiring, renovating and reselling foreclosed and distressed houses in the Los Angeles area, says the government's policy "has been a very positive approach" because "it recognizes the role that (private investors) can play in helping the housing market get back on its feet."
In the L.A. market, according to Wylie, FHA financing now accounts for 40 percent of all home purchases and 60 percent of purchases in predominantly Latino and African-American communities.
Buying foreclosed houses "comes with a lot of risk factors," said Wylie. "There's no title insurance; we don't have a good idea of the extent of the defects" inside properties that have been sitting vacant or vandalized for months. Some houses come with delinquent property taxes to boot, which Wylie's group typically must pay.
This is not a game for the faint of heart.
Then again, the profit opportunities can be significant. Most of the Wylie group's houses sell for more than 20 percent higher prices than Wylie paid at acquisition — a quick turnaround gain that potentially works for buyers, sellers, neighborhoods, and yes, the FHA itself.

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Mortgage applications rose last week

The number of people applying for a mortgage rose last week as lower rates lured more borrowers to refinance.

The Associated Press

Related

NEW YORK — 

The number of people applying for a mortgage rose last week as lower rates lured more borrowers to refinance.
The Mortgage Bankers Association said Wednesday its overall mortgage application index increased 2.2 percent from the previous week. The refinance index rose 4.9 percent, while the purchase index slipped 3.7 percent last week.
The refinance share of activity rose to 72.1 percent of all applications from 71 percent the previous week.
Rates on fixed mortgages edged down last week, but are still more than a half-point higher than they were in late October. They have risen as Treasury yields increased on rosier economic data and expectations that tax cuts will spur growth and spark higher inflation. Mortgage rates tend to track those yields.
The rate on the 30-year fixed mortgage fell last week to 4.78 from 4.82 percent a week earlier. The rate on the 15-year fixed loan, a popular refinancing option, dropped to 4.15 percent from 4.23 percent.
The Mortgage Bankers Association's survey covers more than 50 percent of all applications nationwide.

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Misconceptions about Reverse Mortgages

Myth #1:  You sell your house to the bank:
You always keep title to your house and have complete control over it. You will never lose your home due to non-payment of the loan. Once the loan is settled, you are no longer liable for the debt. 

Myth #2:  You can be forced to leave your home:
Reverse Mortgages backed by the Federal Housing Authority and the Department of Urban Development specifically indicate you cannot be forced to leave your home.

Myth #3:  Your home must be debt-free to qualify:
Even if you have a first mortgage or other debt, you may qualify. But Reverse Mortgage proceeds must first be used to pay off debts that effect title.

Myth # 4:  There are income qualifications that may disqualify you:
There are no income qualifications at all. The loan is based only on your age, the value of your home, the amount of equity you have and current interest rates.

Myth #5:  You will lose your Medicare and Social Security benefits:
Money you receive is a loan, not income. Therefore, your Medicare and Social Security benefits are not effected.

Myth #6:  Your heirs won't inherit anything:
When you are deceased, your heirs can repay the loan and keep the home or sell the home and use the proceeds to pay off the Reverse Mortgage.

Myth #7:  You will have to make a monthly payment:
There is never any monthly payment to make. The flow of payments is reversed. The lender pays you.

Myth #8:  My condominium does not qualify for a Reverse Mortgage:
Reverse Mortgages are not limited to single family dwellings. You can also receive a Reverse Mortgage on condominiums, multi-family dwellings and manufactured housing as well.

For more information call me at (206)930-5606

Ed Moda
Reverse Mortgage Specialist

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Predictions for our Real Estate Market for 2011

 Patrick Doty, Editor, Bellevue Home Team Blog

This is the magic question; isn't it?  Everyone wants to know with some predictability whats going to happen.   We all long to feel safer financially than we have in many months if not for the last 2 years and we have reason to give us some encouragement.

Our  local Bellevue market does seem to be turning around a little as we approach the front side of the bell curve here in mid-January and activity increases.  Aside from that, our local economy and real estate market are held up by businesses and industries that we are privileged to have in our community, like Microsoft, Google, Clearwire, Paccar, Weyerhaeuser, and Boeing causing our economic predictions to be a bit brighter than that of other parts of the country.  In my almost 21 years in real estate I have seen values come and go and we have cause to be optimistic about our real estate market as values, no matter how low they get will always rebound.  The magic question is to what level and the truth is no one really knows, however the upside is with lower prices and rates that are still relatively low, people are finding it a good time to purchase.  Rentals are also increasing as developers of commercial rental property are starting to rebound,.

 

Do you plan on buying or selling a home in 2011, if so where and why?

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Price Points: What you can buy for median price in King Count

By Lisa Pemberton-Butlery

                                                                                                                                                            BRYON ZIEGLER

This bungalow near Seattle's Columbia City neighborhood and Seward Park sold for $355,000 on Dec. 21.  Economists say the Great Recession technically ended nearly 18 months ago. But home sellers around the region are still reeling from its economic sting.

In November, the median sales price of a single-family home in King County continued to tumble — to $359,950, the lowest in more than five years.
Of course, for buyers, the deep price cuts mean more bang for the buck.
Here are six homes around the region that sold in November and December within $20,000 of King County's median sale price.
This turn-of-the-century bungalow — near Seattle's Columbia City neighborhood and Seward Park — has updated electrical and plumbing systems and a partially finished daylight basement with space that could serve as a third bedroom. The home's 6,180-square-foot lot has a fully fenced yard, which features a south-facing deck, a cottage shed and fruit trees.
Living area: 2,180 square feet
Bedroom/bathrooms: 2 bedrooms, 1 bathroom
Year built: 1912
Sold for: $355,000 on Dec. 21.

This Bainbridge Island home is centrally located and features an open floor plan. The kitchen has Zodiaq Quartz countertops, a pantry and an adjacent dining room. The home's nearly 3/4 acre wooded lot offers plenty of privacy and backs a lush greenbelt.

Living area: 1,770 square feet

Bedroom/bathrooms: 3 bedrooms, 2.5 baths

Year built: 1998

Sold for: $365,000 on Nov. 4

This rambler in the heart of the Bridle Trails community near Kirkland features an open floor plan. The home has been updated throughout with new white vinyl windows, crown molding, hardwood floors and modern lighting fixtures. The 9,450-square-foot lot is fenced.

Living area: 1,290 square feet

Bedroom/bathrooms: 3 bedrooms, 2 baths

Year built: 1969

Sold for: $350,000 on Dec. 15

This Sumner home features dark hardwood floors, stainless-steel appliances and a huge master suite with a five-piece bathroom and a walk-in closet. The home sits on a 7,427-square-foot lot and has an attached studio apartment with kitchen, full bath and separate entry.

Living area: 4,003 square feet

Bedroom/bathrooms: 5 bedrooms, 4.5 baths

Year built: 2008

Sold for: $369,950 on Dec. 15

Life on the 10th fairway at the Gleneagle Golf Course in Arlington is all about entertainment in this one-story home, which features a gourmet kitchen, vaulted ceilings, a great room and formal living and dining rooms. The 8,276-square-foot lot has a sprinkler system, garden space and a jumbo-sized third garage designed for a recreational vehicle.

Living area: 1,944 square feet

Bedroom/bathrooms: 3 bedrooms, 2 baths

Year built: 1996

Sold for: $359,950 on Dec. 16

This two-story, south-facing condominium near Lake Union in Seattle offers stunning views of the lake, the mountains and, of course, the city. The main level has floor-to-ceiling windows and an open kitchen and dining area. The lower level features a master suite with a full bath and a walk-in closet, and a second bedroom. There are decks on both levels of the unit.

Living area: 1,398 square feet

Bedroom/bathrooms: 2 bedrooms, 2.5 baths

Year built: 1992

Sold for: $350,000 on Dec. 7

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Purchasing a home with a Reverse Mortgage....great idea for some

Ed Moda,Reverse Mortgage Specialist
Email: emoda@acceptancecapital.com
Cell: (206)930-5606 Off: (425)458-2651

A Reverse Mortgage is a Government Insured program that was created by the FHA to allow Senior Citizens over the age of 62 to access the equity in their homes as tax-free income without making any monthly payments during their lifetime or until the home is sold.

There are no credit, employment or income requirements for the program which makes it much easier to get than a traditional loan. The actual name for the program is a Home Equity Conversion Program or HECM. Based on three determining factors, age, home value, and the banks interest rate, any senior can qualify to receive a portion of money to be used without restriction for their financial needs.

Reverse Mortgages loans have always been a great way to turn the equity in your home into tax free cash – without having to make monthly payments. Changes by Congress to the FHA-insured Reverse Mortgage program now allow seniors to buy a home with a Reverse Mortgage – with no credit score requirement or income verification!  Although this sounds too good to be true, Americans 62+ can now use the equity from the sale of their previous home, or other cash or savings, to move into a different home – just with a single down payment. You will never have to make another mortgage payment, as long as you live in the home as your primary residence, maintain your home, and pay taxes and insurance. Imagine the financial independence you can achieve by eliminating your mortgage payment once and for all. Best of all, if your home’s value appreciates during the term of the Reverse Mortgage you (or your heirs) keep any remaining equity after repaying the Reverse Mortgage loan.

Purchasing a home with a Reverse Mortgage is very similar to purchasing a home with a conventional mortgage.  Rather than determining a down payment based solely on the purchase price, the minimum down payment will be based on a factor of your age, interest rates, and the lesser of the home’s appraised value, purchase price, or FHA-imposed national lending limit.

Reverse Mortgage appraisals, inspections, contingencies, documents, and closings are virtually the same as those with a conventional mortgage. Because of the HUD-required independent borrower counseling, some Reverse Mortgage escrow periods may be slightly longer than that of a conventional mortgage – although this isn’t always the case

The basic eligibility requirements to purchase a home with a reverse mortgage are:

1.      All titleholders must be aged 62 or over

2.      The purchased home must be your principal residence

3.      The purchased home must meet HUD’s minimum property standards and be

either a single-family residence, a residence in a 1- to 4-unit dwelling, certain

condominiums, or an eligible manufactured home.

4.  The down payment must be from qualifying sources

5.  You must complete a HUD-approved counseling session

The basic benefits are:

1.      Eliminates Mortgage Payments

2.      No income or minimum credit score requirement 

3.      You keep the title

4.      Remaining equity goes to you or heirs, not the bank

5.      No pre-payment penalty

6.      FHA-insured

7.      Loan is non-recourse (This is a big Deal)

For more information about this program:

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King County home sales in December strongest since summer

The median price of houses sold in King County in December was $370,000, down 2.6 percent from December 2009's median of $380,000.

By Eric Pryne

Seattle Times business reporter

You've heard of Christmas in July? The real-estate market got just the opposite last month: July-like sales for Christmas.
More houses sold in King County in December than in any month since federal tax credits expired last summer and sent sales into decline, according to statistics released Wednesday by the Northwest Multiple Listing Service.
Buyers closed on 1,458 single-family homes last month — nearly as many as in July, and a whopping 34 percent more than November's total.
Winter usually is a slow season for home sales. They typically peak in summer, then tail off as days get shorter. December's closings usually fall short of November's.
That pattern apparently broke last month. Just four fewer houses sold in King County in December than in the same month in 2009, which was the best December since 2006.
Why the surge? Industry insiders and observers cited several possible influences:
• The market finally has worked its way through the lull it fell into after the tax credits' expiration.
• Buyers are climbing off the fence, even if they suspect prices will continue slipping, because they fear interest rates will rise and wipe out any savings.
• There may have been a push to get some long-languishing short sales — sales for less than sellers owe lenders — closed before year-end.
But there could be more to the surge than that, said Doug Davis, owner/broker at Hallmark Realty in Kirkland.
"There does seem to be a little bit of renewed optimism out there. Let's talk in two months and see if it's a trend," Davis said.
More numbers:
• The median price of houses sold in King County in December was $370,000, down 2.6 percent from December 2009's median of $380,000.
• King County condo sales last month slipped 4.5 percent from the same month in 2009. The median price, $225,000, was down 8 percent year-over-year.
• The median price of a single-family home that sold in Snohomish County in December was $265,250, off more than 7 percent from December 2009. Sales there fell more steeply, off 10 percent year-over-year.

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HUD investigates lenders' fair-housing practices

Federal officials have launched an investigation to determine whether 22 mortgage lenders have been discriminating against qualified African-American and Latino borrowers by denying them government-insured loans.

By JACOB ADELMAN

The Associated Press

Related

LOS ANGELES — Federal officials have launched an investigation to determine whether 22 mortgage lenders have been discriminating against qualified African-American and Latino borrowers by denying them government-insured loans.
The U.S. Department of Housing and Urban Development (HUD) said the inquiry is in response to complaints filed Dec. 7 by the National Community Reinvestment Coalition (NCRC) accusing 22 banks nationwide of violating fair housing laws.
The coalition said the lenders denied Federal Housing Administration-insured loans to borrowers with credit scores that met the federal standard of 580 to be eligible for the insurance against default, but the lenders set higher credit-score thresholds.
The Washington-based NCRC claims those requirements disproportionately harm black and Hispanic communities, since many minority borrowers' credit scores fall between the federal threshold of 580 and the higher benchmarks set by the banks.
The policies have "the effect of discriminating against African-Americans, Latinos, and residents of African-American and Latino neighborhoods across the nation," the group wrote in the complaints that it announced Dec. 8. The group also said the banks don't have a legitimate business reason to withhold mortgages from borrowers who meet FHA credit guidelines, since the government's insurance eliminates their risk.
"The decision by some banks to not follow the FHA's policy is cutting qualified borrowers off from accessing credit, and in doing so, causing harm to their ability to prosper, build wealth and for our economy to grow," NCRC President and CEO John Taylor said in a statement.
The complaints seek unspecified monetary damages and an injunction forcing banks to change their lending policies.

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Bellevue Towers developer turns project over to lenders

The region's biggest condo project ever has been transferred to its lenders after the developer sold less than a quarter of its units in almost two years.

By Eric Pryne

Seattle Times business reporter

The new owners of Bellevue Towers announced price cuts to try to spur sales at the 539-unit complex.

"This is an acknowledgment that prices today aren't what they were," Ira Glasser, an adviser to Morgan Stanley, said Monday.  At 43 and 42 stories, the project's two towers are the Eastside's tallest buildings. Gerding Edlen built them in large part with $275 million borrowed in January 2007 from a consortium of lenders led by Morgan Stanley.That loan matured a year ago, Glasser said, and the lenders have been paying the project's bills since then. The ownership transition was "an amicable and consensual agreement" to put the towers on new financial footing with minimal disruption, he added.

The Bellevue Towers takeover is the latest sign of how far the high-rise, high-end condo market has fallen since the real-estate bubble popped.Sales at most new projects have been sluggish. Some, including The Bravern in downtown Bellevue, have been converted to rentals until the market recovers.  Gerding Edlen, one of Oregon's most prominent developers, also has lost two Portland condo projects to lenders because of slow sales, according to The Oregonian.

Bellevue Towers was the firm's first large project in the Seattle area. It broke ground before the market tanked, and by early 2008 about one-third of the units had been presold.

By the time the buildings were completed in early 2009, many of those prospective buyers either couldn't or didn't want to close.  The project's financial status has been the subject of considerable speculation in Seattle's commercial real-estate community for months. The Morgan Stanley takeover comes as no surprise, said Seattle land-use economist Matthew Gardner.

But it probably doesn't signal an end to Bellevue Towers' challenges, he added.

In addition to the more than 400 unsold units, he said, more than 100 units remain on the market at Washington Square, the towers' closest high-rise competitor in downtown Bellevue.

"That's a lot of supply in a condo market that I don't believe has yet bottomed in terms of price," Gardner said.

When Bellevue Towers opened in February 2009, condo prices ranged from $399,000 to $4.4 million. A Gerding Edlen principal predicted the project, at Northeast Fourth Street and 106th Avenue Northeast, would sell out in two years.

Five months later, with less than 10 percent of the units sold, Gerding Edlen cut prices an average 20 percent. With the additional reductions announced last week, average prices are 30 percent lower than two years ago, Glasser said.

County records indicate just three condos have sold over the past three months. But 10 sales are scheduled to close this month, Glasser said, and 50 more are in the pipeline. Those 50 buyers are being contacted this week and offered the reduced prices, he added.

Traffic at the project's sales center is up, Glasser said, and the condo market appears to be on the upswing. "I think we can sell out in the next few years, if the economy lets us," he said.

In addition to the $275 million loan from the Morgan Stanley consortium, county records indicate Gerding Edlen also took out a $67 million "mezzanine" loan — something like a second mortgage — from Seattle real-estate investment company Washington Holdings to help build Bellevue Towers.

It's unclear whether that loan has been repaid. When contacted Monday, Washington Holdings CEO Craig Wrench declined to discuss the status of the debt.

But Glasser said the Morgan Stanley loan is the new owners' only debt.

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Rebates for Appliance Upgrades Offered by PSE

In what's supposed to be a La Nina winter marked by cooler and wetter conditions, the Seattle, Bellevue, and Puget Sound area has been more mild than normal. However, the weather maps are showing changes coming at the beginning of the year, and local weathermen are now forecasting the change to cooler and wetter conditions. If it gets cold like they say it should, then most of us will be feeling the sting when the heating and energy bills follow.

But there's good news for those of you who own real estate and have been thinking about upgrading to more energy efficient appliances and heating systems! Puget Sound Energy has a rather extensive rebate program for energy efficient home conversions including heating systems, insulation, lighting, and even full on conversions to gas.
Some of the notable rebates include:

• ENERGY STAR qualified heat pump water heater: $250
• ENERGY STAR qualified tankless water heater: $150 - $250
• Converting home and water heating to natural gas: $1,950 - $3,950
• Clothes Washer: $50 - $100

We may not all be swapping out our appliances or systems, but there are even smaller, $3 on CFL light bulbs that we can all take advantage. More info can be found on PSE's Rebate List.

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Manufactured home with a green twist

A Seattle architect is the "guinea pig" for this manufactured house 

By Jesus Chavez

The second of six modules for a unique new home is lifted by a crane to its site on South Lane Street in Seattle. The home's builder says it's the first modular home in the city to attain the highest level of sustainability certification. 

Planted in the middle of narrow South Lane Street in Seattle's Central Area, a 115-foot crane lifted a kitchen module into place on a bare foundation. Five more modules followed, assembled like giant Lego pieces.
Within a few hours in early December, a two-story, 1,790-square-foot home took shape.
The home's builder, Seattle-based Greenfab, says it's the first modular home in the city to target the highest level of sustainability certification from the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program.
LEED raters have been working alongside Greenfab through the designing and building process, and the official certification is expected two months after the home is finished next month.
"Things are going great. ... It's among the highest scoring projects we've had to date," said LEED rater Tom Balderston. "I think they put a lot into the design process, a lot more than most builders do."
The home boasts many sustainable features, including insulation that reduces electricity usage by 50 percent; an interactive home monitoring system to track energy consumption; a 1,400-gallon aboveground water tank that captures rain for toilet flushing; and three 300-gallon storage basins that filter and treat gray water — water from showers, sinks and the washing machine — for watering the lawn and garden.
Greenfab's first home is owned by its architect, Robert Humble, who plans to move in with his wife.
"As the architect, the contractor and the owner, we can do some things on this house that will really push the envelope," Humble said. "It's a prototype in every sense of the word, and we're using this opportunity to ... literally be the guinea pig on it."
Before Humble occupies the house, it will be open for tours from mid-February through March to show the public Greenfab's approach to sustainable and modular home development.
"We want people to get inspired and become educated on what it does mean to live more sustainably," said Greenfab co-owner Johnny Hartsfield.

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