Town of Blacksburg:

• Town residents can begin placing their Christmas trees at the curb beginning January 1.  The trees will be picked up the first two weeks of January, giving all of us procrastinators plenty of time to finish the job.

Town of Christiansburg:

• Trees can be placed on the street for curbside pickup during the week of January 4th through the 11th.  There are no drop-off points in Town that can take trees, curbside pickup only.

It’d be really nice if there’s a local company that could help facilitate that (note to self)?

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Q: So with all of the winter weather we’ve been having, and scheduled to get, what precautions or things should homeowners be doing to prevent damage to their homes?

A:  Have you ever had the misfortune of cleaning up a smelly, wet and very cold mess on a freezing winter day? I hope you haven’t and never do. Thousands of people, however, suffer through this nightmare every year because unprotected water pipes in their homes freeze and break.

A more subtle destructive winter wonder is the phenomenon known as ice damming. Snow on your roof can lead to ice dams that damage the roof, gutters, walls, interior ceiling and even items inside the home.

There are ways you can prevent frozen pipes and ice dams, simple solutions to avoiding the hassles and costs of cleaning and repairing your home.

The value of two minutes

Two minutes. That’s about as long as it takes to begin a small trickle of water from your home’s hot and cold faucets and to open the doors of cabinets with water pipes running through them.

Two weeks. That could be the length of time needed to find and hire contractors to tear out smelly, water-soaked carpet and wallboard, dry the remaining flooring of your house and replace all that might have been destroyed by flooding from burst, frozen pipes. An eighth-inch (three millimeter) break in a pipe can spew up to 250 gallons (946 liters) of water a day, wrecking floors, furniture and keepsakes.

As you can see, there can be a tremendous advantage to spending a couple of minutes taking simple, no-cost precautions to prevent frozen pipes. The saying, “time well spent,” is certainly an under-statement when you consider the soggy consequences of doing nothing. Here are a few additional steps to protect your home or apartment:

• Use heat tape to wrap pipes. (Use only products approved by an independent testing organization, such as Underwriters Laboratories, Inc., and only for the use intended (interior or exterior). Closely follow the manufacturer’s installation and operation instructions.
• Seal leaks that allow cold air inside, near where pipes are located.
• Close air vents leading under the house.
• Disconnect garden hoses and, if practical, use an indoor valve to shut off and drain water from pipes leading to outside faucets.

What are ice dams?

After several days of melting-freezing cycles, it’s common for the melted water and ice to work up under the shingles until water enters the attic and eventually does damage to the ceilings, wall and contents.

In cases where the ice dam goes unnoticed for an extended period of time, it can do significant damage to the building and its contents.

There’s no way to guarantee an ice dam won’t damage your home, but you can take steps to cut the chances of an ice dam forming in the first place:

• Thoroughly clean all leaves, sticks and other debris from your home’s gutters and down-spouts.
• Make every effort to keep snow on your roof to a minimum. Long-handled devices on the market called “roof rakes” let you stand on the ground and pull the snow off the roof. Keeping heavy snow loads off your roof reduces the chances for both ice dam formation and roof failure due to the weight.
• All winter long, keep gutters and down spouts clear of snow and icicles.
• Evaluate the insulation and ventilation in your attic. Most experts agree the R-value of attic insulation should be at least R-30 (R-38 is preferable in northern climates).

   For more information on these and other home safety tips, stop by my office or visit statefarm.com®.

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Reflecting on the past year, broker Mary Wright of NRV Gateway Realty, Sales Director Diana Blair of RE/Max 8, and Brandon Nicely of Alcova Mortgage shared their thoughts about real estate in 2009.  Blair noted that in both September of 2008 and 2009, the average price per square foot of homes on the market was the same – $116 – indicating, to her, that sales prices held steady.

“Over a 15-month period, the percentage change was .8 percent or .008, which is good … we made it through the worse economic setback since the Depression with a slight change since the Depression with a slight change in price per square foot pricing.  The percent change for the last 12 months is up 4.5 percent.”

Wright reflected back to December 2005, pointing out that was when NRV Gateway first opened its doors.

“Business was brisk for us all back then.  Now, our national has weather a recession that has lasted over 18 months.”

But she hastened to add that the New River Valley has been somewhat insulated from economic downturns in the past, although every family in the area has been affected in some manner this time around.

“It has been difficult for sellers and agents alike.  Home values have declined and buyers still expect discounts,” she said.  It is a tough pill to swallow when buyers who bought at the top of the market now are discovering the pressure of dropping home values.”

“But”, said Wright, “this is a cyclical business, and this, too, will pass.  I think the events of this last year have been character building, and I’m hoping familiers will emerge strong[sic] than ever, with better savings strategies, and more supportive of each other.”

Nicely said 2009 will be “the year to remember” for anyone involved in real estate.  The government kept interest rates low, helping millions to refinance, although the new HVCC (Home Valuation Code of Conduct, which went into effect May 2009) appraisal process caused hurdles.

Nicely said the new code caused some appraisals to come in lower than expected, leaving some homeowners unable to refinance.  Then, more than 150 banks failed, causing underwriting guidelines to change.

On the positive side, the First Time Homebuyer Credit of $8,000, together with low rates, helped keep the mortgage industry alive in a “very tough economy,” he said.

While 2009 was a year of transition, said Nicely, he forecasts 2010 as the year of moving forward.

“We have seen most lending practices put in place, and now everyone can start to adapt to them,” he said.

This adaptation takes in account, he pointed out, that three years ago it was 360 degrees different.  He also said the homebuyers credit – which has been extended to April 2010 – will keep homebuyers signing contracts.

“The government has informed everyone they will not continue to buy mortgage-backed securities throughout 2010, like they did in 2009, so everyone should be prepared to see rates rise a half-point through June 2010 and another half-point by December 2010.”

Wright is more cautious about the first half of 2010, saying she’s been hearing that the first six months will be tough and the last half better.

“Sarah Bohn of Northwestern Mutual presented a graph showing economical milestones since the Great Depression,” she said.

Wright continued, adding that some of those “troughs” were deep and wide, covering years during the Depression.

“What really caught my eye tough[sic] was the sharp upswing immediately following those tough economic periods that seemed to soar even higher than the downturn.  This was repeated time after time throughout history.  I’m optimistic we will see history repeat itself.”

Nicely repeated the mantra that seems to be going around:  ”There will be no better time to buy in history between now and April.”

Why?  He pointed out that rates are at an historic low, government is “handing out cash for signing a contract,” and prices are at their lowest levels in years.

Wright recalled “Shift,” a book by Gary Keller that recommends sellers trade up in a down market.

In Keller’s book, he writes, “There is only one certainty in the real estate business – that it is cyclical, and what goes up must come down.  ’Shift’ teaches agents the foundational tactics that jump-start your business in tough times, and power it forward in good times.  ’Shift’ is not about teaching agents how to have a good week or year; it is about showing them how to have a great career.

From last week -

I appreciate enthusiasm, and while real estate in the New River Valley isn’t falling through the floor it’s not going gang busters, either.   I will continue to say that my enthusiasm in 2010 will be tempered.  Home buyers and sellers in the New River Valley need to pay attention to unemployment in our area – many areas of the greater NRV are really struggling, despite having unemployment rates lower than the national average.  Unemployment is going to be a huge component of where the New River Valley real estate market heads in the foreseeable future.

None of us have a crystal ball, but we have access to the same data, and the data shows that things aren’t exactly as reported.  Based on what’s available, 2010 will see continued opportunities for buyers and sellers as prices and interest rates move more towards center … plain and simple.  I disagree with Brandon in his assessment that there’s no better time in history to buy a home than right now.  While it’s true that mortgage rates are lower than they’ve ever been, home buyers should still be paying attention to falling prices and bringing money to the table.

And consumers don’t care what Gary Keller has to say to agents, do they?

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It might be time to back up and recap:

• A first-time buyer is someone who has not owned a home the past three years.  Married joint filers must BOTH meet the criteria to be eligible.
• You must be UNDER CONTRACT – that means contract is signed and initialed – on a residential property you intend to use as your primary residence, by 11:59pm April 30 2010, and you must close before 11:59pm June 30 2010.
• The maximum credit allowed for a first-time buyer is 10% of the purchase price, UP TO $8000.  Homes priced at more than $800000 are not eligible for any credit (I guess they figure you don’t need the money at that point).
• The credit is deducted directly from your tax liability for the year – if your liability is LESS THAN the credit, you get money refunded to you.
• The tax credit isn’t limited to first-time buyers any longer … current homeowners who have lived in their home for five consecutive years – out of the past eight – are now eligible for up to $6500 in tax credit.
• If you make $145001 or more a year ($245001 or more if filing jointly), you don’t qualify for the credit.

Clear as mud?  The credit had an impact on the housing market in 2009, but I don’t expect we’ll see the same in 2010.  Nevertheless it’s here to stay … at least until the end of June, but don’t expect that it’ll be extended again.

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What’s your “best guess”?

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Bill’s experience is well-respected throughout the New River Valley (and beyond), and we’d be well-served to pay attention to his points.  In many ways – my opinion, not his – we’ve not planned well for growth in our Town, and we need to get back to a point where we know where we’re going.  A lot of work went into our Comprehensive Plan, and it allows for intelligent growth … he makes a good point, are we putting more emphasis into economic sustainability or environmental sustainability?

Q: What are your thoughts on how to boost economic development both in Blacksburg and in the region?
A: I think that what we’ve got to do here in Blacksburg is we’ve got to create an environment in which economic development is welcomed, not discouraged. And in a lot of cases it’s not overtly discouraged, but the town of Blacksburg has got such a terrible reputation for regulation and stumbling blocks and delays and a lot of issues that frankly scare people. We’re fortunate, though, that we have a thriving populous here in Blacksburg that continues to attract people. But being in the kind of business we’re in, where we interact with economic developers that come in here … most of them say they’d never do it again.

We just don’t have the reputation of embracing economic development in the town, and I’m very hopeful that the new [town] council is going to recognize that and do some things that can change that attitude.

Q: What are the regional impacts of the “smart growth” and “sustainable growth” movements, and how is that affecting the economy and the construction/engineering industries?
A: As far as sustainable growth is concerned, I think that is such an overused term especially in Blacksburg and I think it’s very confusing. When you hear “sustainable growth” from one person and then you hear it from another, they are probably talking about different things. The classical definition of sustainable growth has to do with sustainable growth, sustainable economies, sustainable society, sustainable development. I mean, I don’t know that I have a complete understanding of what it means. Now in Blacksburg I feel like it’s defined as environmental sustainability, and that from a business point of view I think is certainly important.

But you also have to realize there are other types of sustainability that are important, too, like economic sustainability and bringing in economic development that will go on for years. And I think most people in Blacksburg are probably confused to the point they don’t even think about that — Blacksburg is very environmentally sensitive and that seems to drive a lot of decisions that are being made.

Now smart growth, I understand that a lot better and I agree with that. Smart growth doesn’t mean no growth, however. I think smart growth means planning growth in such a way that you utilize the existing infrastructure that you already have built to the max before you start going out and building new infrastructure. That’s difficult to do a lot of times, but it is something we should strive for. And here again I think Blacksburg particularly … and a lot of the officials of Blacksburg, don’t know the real definition of smart growth and sustainable growth. This town is going to grow and we’ve got to do it in a smart way but it’s also got to be economically sustainable.

Thanks to the Blue Ridge Business Journal for a well-written article, and to Bill Aden for his work throughout the area.

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Thank you for voting Coldwell Banker Townside the #1 real estate company in the New River Valley; I’m thrilled to have been a part of working with such a great group of people over the last seven years.  There’s no question that the expertise at this company is second to none.

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1. Increase net worth - In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was $4,000, while that of homeowners was $184,400.  A home plays a huge part in your financial future.
2. Tax deduction – One of the largest tax deductions available is the amount of interest paid on a mortgage.  On a $150,000 loan, at a 5.5% interest rate, you can write off as much as $8,000 as deductions.  Consult your tax adviser to determine your status.
3. Long-term Appreciation - Over the last few years, home prices have corrected and become more affordable.  While that is good news for buyers, it has overshadowed the long-term appreciation on a home’s value.  From 1950-2002, US home prices appreciated at an annual growth rate of 4.8%.  If you only use a 3% appreciation rate on a home purchased today at $150,000, that home will be worth $364,000 in 30 years.
4. The government is handing out $8,000 to first-time buyers if they purchase a home and keep it for 3 years.

_______________________________________________________________

Brandon is a branch partner at Alcova Mortgage. He enjoys doing his taxes, firewalking and competitive eating, but not necessarily in that order. You can reach him at brandon@alcovamortgage.com, or 877-552-7150.

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Reflections
How was 2009 in real estate terms?  Those who wanted to buy were sitting pretty.  Those who needed to sell learned that positioning their homes for a buyer’s market was a new experience compared to previous years.

According to Diana Blair, sales director for RE/Max 8, buyers are now paying 95 to 99 percent of the list price.

“We do not overprice homes.  We list them to sell.  Buyers need to look at homes in their price ranges in our area market,” she advised.

Blair said homebuyers looking at national trends think that they can make “bargain offers,” but in the New River Valley, that may not always be the case.

“While that trend may be a reality in some distressed markets, it is not a trend in the NRV market,” said Blair.  ”The good news for both buyers and sellers is that buying a home here is a safe and great investment since our market does not tend to fluctuate.”

L. Garrett Weddle, a REALTOR with Coldwell Banker Townside, agreed, saying that he looks for an improved market next year.

“At the beginning of the downturn, it was very difficult to get sellers to realize they had to reduce their price expectations.  Now I find it difficult to get buyers to increase their price expectations.  In my mind, that may indicate we have bottomed out and can look for better expectations on both sides this coming year.”

Jeremy Hart, a REALTOR with NRVLiving/Coldwell Banker Townside, described 2009 as a year of “tempered enthusiasm.  While most areas of the country have seen major price declines coupled with drastic increases in short sales and foreclosures, the greater New River Valley residential market continues to be relatively stable.”

He cautioned that because the New River Valley is slightly behind other areas of the state (notably Northern Virginia and Hampton Roads), “it’s not time to say we’re completely out of the woods.”

Hart said he spoke with Brandon Nicely at Alcova Mortgage about this topic, and Nicely’s take was, “Since we didn’t see a lot of Pay Options ARMS (adjustable rate mortgages) during the 2004-07 rush, he doesn’t expect a major swing in refinances other than from those who are current and paying on their existing mortgage.”

Hart reminded readers that the main topic of conversation this past year was the First-Time Homebuyers Credit, which has been extended to April 2010.  ”The credit has certainly helped get some people off the fence, but it’s not been without criticism, either, namely from people wondering just where the source of the money to repay these credits will originate,” he pointed out.

His final point is that buyers had their pick of the market in 2009, and currently inventory levels (as of Dec. 1) were at a 10-month level.

“While buyers aren’t getting homes for pennies on the dollar, it does mean that sellers need to be more aware of price than ever before,” he said.

Steve Bodtke, a REALTOR with RE/MAX 1st Realty in Blacksburg, called it Economics 101:  ”When you consider low rates, good prices, and (potentially) a tax credit of up to $8,000, there is no reason you should not at least consider making a purchase or a move to a home more fitting to your needs.”

For this reason, he said he thinks 2010 will be a very good year with reduced inventory in the New River Valley market.

I appreciate enthusiasm, and while real estate in the New River Valley isn’t falling through the floor it’s not going gang busters, either.   I will continue to say that my enthusiasm in 2010 will be tempered.  Home buyers and sellers in the New River Valley need to pay attention to unemployment in our area – many areas of the greater NRV are really struggling, despite having unemployment rates lower than the national average.  Unemployment is going to be a huge component of where the New River Valley real estate market heads in the foreseeable future.  Stay tuned to The Roanoke Times to see how Sarah’s forecast looks for 2010.

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Last week, I posted this picture, and here’s the rest of the story:

“The good news is that I truly out did myself this year with my Christmas  decorations. The bad news is that I had to take him down after 2 days. I had more people come screaming up to my house than ever. Great stories. But two things made me take it down.

First, the cops advised me that it would cause traffic accidents as they almost wrecked when they drove by.

Second, a 55 year old lady grabbed the 75 pound ladder almost killed herself putting it against my house and didn’t realize it was fake until she climbed to the top (she was not happy). By the way, she was one of many people who attempted to do that. My yard couldn’t take it either. I have more than a few tire tracks where people literally drove up my yard.”

So that was the backdrop to the picture – it’s since been confirmed by Snopes.com to be true.  And did you guys ever come through with captions!  I’m kind of surprised no one went year 2000 on me and called him a “hanging Chad”, but nevertheless this was fun.  Thanks to Russ and the Easy Chair Coffee Shop for participating – make sure to go by them and try one of their daily coffees, brewed on site!  And now for the winners:

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