Oh Say Can You See?

Have you noticed the new street signs that are sprouting up all over town? The ones with the little bitty letters on them? Well the new design comes courtesy of the Federal Government!

In a flash of helpful creativity, the Highway Safety people in Washington deemed it necessary to mandate that all new street signs be in upper and lower case to "make them more readable" because "studies showed" that words with both upper and lower case "were easier to read" (Even if the letters are made smaller to accommodate this new style?)

The problem is that with this mandate, the street signs are not being replaced with larger signs to allow for larger letters, and the result is a stylish sign that is now harder to read. This mandate by the way, comes at a time when cities and states are broke, or fast running out of money. And the new sign mandate comes at no small cost. All because a committee of "experts" suggested this style change to a government agency. And the agency ran with the new idea.

Maybe someone at the Highway Safety Administration thought that ALL CAPS street signs was SHOUTING and of course, we couldn't have that.

Links:

USA Today

KHON Honolulu

NY Daily News

One Short Sale Experience with FNMA

Last year I listed a home in central Tucson which ended up with a contract for a short sale. (A short sale is a sale at a price that will not cover the payoff of the existing mortgage). The foreclosure process had begun.

Per the contract for a short sale, the inspection period would not start until we received a notice of approval of the short sale from the asset manager for the mortgage holder (investor). As a rule, buyers do not want to spend money on inspections and an appraisal if they do not know if they can actually buy the home, so that is a condition in a short sale contract.

The contract price was $185K.

Long story short, after about 2 months from receipt of the buyer's contract, the asset manager finally told us that FNMA approved the sale but would only give us one week to close, if not, the home would be sold at auction. The Buyer, with little time for inspections, appraisal, and title work, cancelled the contract. FNMA took the home back.

Almost four months later, the new owner, FNMA, put the home back on the market for 189,900. After languishing on the market for a few months, with several price reductions, it is currently priced near 170K, still without a buyer. This is almost seven months after the home could have been sold for $185K, in July 2010. Seven months of mortgage payments lost, seven months of interest lost.

In fairness, the bank asset managers and FNMA have a big job to do, and are clearly overworked and over-extended. There is not enough staff available to do this important job. But situations like this do avoidable damage to our market and neighborhoods. There have been steps taken to streamline the process but it does not seem too evident to me. Buyers should have a reasonable opportunity to buy a property from a distressed seller without unnecessary roadblocks and delays from the system.

It just seems too easy to take back a property and sell it for less, months later.

Another Reason Not To Live in New York

Reading the Wall Street Journal today, I came upon an interesting article regarding a recent tax case in New York State. It seems that an administrative law judge has found that "vacation homes" in the state are de facto evidence that the homeowner is a resident of New York, regardless of how much time that vacation home owner spends in New York! That means that the out of state home owner is liable for New York income taxes, even if the home owner has not stepped into the home all year! Solution: Sell your New York cottage and buy a winter home in Tucson. No tax penalty here (yet!)

Cash for Clunkers

I was at a dinner party last night and the subject of the popular Cash for Clunkers" came up. A sure fire subsidy for the car manufacturers, the program has instantly boosted sales for the moribund auto industry and has allowed people to trade in their less energy efficient car for a brand new one while enjoying up to $4500 from the government for a down payment.

One of the guests at the party was a technician who works in a local auto shop. He was quite animated in his opposition to the program, primarily because of the waste. You see, when a new car buyer brings in his clunker for trade, the dealership is instructed to drain the oil out of the car, then pour a silica (sand) product into the engine and run it until it quits, effectively "euthanizing" the car. The car is then crushed and sold for scrap.

Not only does this program, in many cases, eliminate a perfectly good car from the marketplace, it also eliminates the opportunity to recycle parts from the car, which of course includes a motor (which might run cleaner than one that it could replace) doors, side panels, alternators, bumpers, radiators, mirrors, wheels, gas tanks, trunk lids, chassis, etc. The waste, he said, is appalling and to label this project as "green" is simply a lie.

Many industries are being given subsidies these days: banks, investment houses, the auto industry and yes, even the real estate industry, with the current $8000 tax credit. If the real estate tax credit program was run in the same manner as "Cash for Clunkers", they would be bulldozing a "clunker" (old?) house with no salvage allowed for every subsidized home sold. That wouldn't be right, and "Cash for Clunkers" isn't right either, especially from a "green" perspective.

What do you think?

Ham Radio Antennas

Todays Az Daily Star had an editorial regarding a recent bill being produced in the AZ State legislature that would allow "reasonable accomodation" for ham radio antennas in neighborhoods governed by HOAs. They came out against the bill.

As you know, I am a real estate broker. I am also a ham radio operator.

A few years ago, I represented a ham operator in the purchase of a town house that was regulated by an HOA. We negotiated with the HOA board to allow a small VHF antenna on the home. We provided a reasonable explanation of the hobby, the public safety aspects and included a picture of the antenna and its dimensions.

The board granted, in writing, permission for my client to erect the antenna, so he bought the place.

It is unfortunate that these days, if someone wants to buy a newer home, it is almost inevitable that it will be governed by a HOA. The power that these associations have over people should be regulated.

Rather than some blanket prohibition, which I believe that many HOA boards insist on, there should be "reasonable accommodation" for certain things. Solar power, clothes lines and yes, ham radio antennas. I believe that this bill is a step in the right direction.

Sewer Fee Update!

This just in from the Tucson Association of Realtors:

Waste Water Fees

At the last Public Affairs Committee meeting the members voted to support Option C of Pima County Wastewater's proposal to raise wastewater fees. On Tuesday the Board of Supervisors voted to adopt Option C as well but are still interested in raising the connection fee which was part of Option D. The four options are laid out below.

• Option A - Increase the volume rate assessed to all customers by 16.75% ($2.81) as early as possible in 2009, by 16.75% ($3.28) in July of 2009 and by 16.75% ($3.83) in January of 2010.

• Option B - Increase the volume rate assessed to all customers by 25.25% ($4.24) as early as possible in 2009, by 9.25% ($1.95) in July of 2009 and by 9.25% ($2.13) in January of 2010.


• Option C- Increase the fixed monthly service fee assessed to all customers by $1.50 and increase the volume rate by 12.75% ($2.14) as early as possible in 2009. Increase the volume rate by 12.75% ($2.41) in July of 2009 and increase the fixed monthly service fee by $1.50 and increase the volume rate by 12.75% ($2.72) in January of 2010.


• Option D - Increase the fixed monthly service fee assessed to all customers by $1.50 and increase the volume rate by 12.75% ($2.14) and increase connection fees by 4% as early as possible in 2009. Increase the volume rate by 12.75% ($2.41) in July of 2009 and increase the fixed monthly service fee by $1.50 and increase the volume rate by 12.75% ($2.72) in January of 2010.

Why Own a Home?

To me, the big motivator for home ownership is lifestyle: privacy, personal enjoyment, and self expression, with a bonus of shelter. With a rental, you get shelter. When you own a home you get more.

My home is worth less than it was two years ago but I still enjoy living here, I am happy that I don't have to ask anyone's permission to hang my photo gallery, paint the interior green, tear up the carpet and replace with tile, or radically change the landscaping. I can stay here for as long as I can make the payments. Someday I will own it outright.

If everything was only about the bottom line, no one would ever buy that fancy red sports car in the showroom, a student's artwork at a school gallery, or that little red brick 1950's charmer on the corner.

The real bottom line is: If you found the place you want, can afford it and you plan on sticking around for a while, go ahead and buy it. Life is too short to live in someone else's house if you don't have to.