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Friday, August 2, 2013
Tuesday, July 30, 2013
4 Home Improvements That Will Save You Money
By GEOFF WILLIAMS
Judging by the TV commercials, most home improvements are a blast. You waltz into a store, throw a bunch of new faucets and buckets of paint in your shopping cart, without sweating about the cost, then transform your dingy kitchen into something out of, well, a TV commercial.
Frequently, those TV spots are spot-on. It is fun to have a new kitchen or to show off your newly installed hardwood floors to your friends and family. But it's all too easy to forget about home improvements that will only get you a polite nod when showing them off – and yet if you ignore them, they could cost you serious money.
So if you're a homeowner with some extra cash this month, look around. There's plenty you can do.
The basement. Particularly if you live a humid climate, you could install a dehumidification system, suggests John Isch, co-chair of the American Institute of Architects Custom Residential Architects Network. This is a much more sophisticated operation than your basic humidifier and will get rid of the humidity in the basement, and some are designed for the entire house.
It may not sound like much of an improvement at first, especially if your family and visitors aren't complaining about the humidity in your home, but even if it isn't noticeable, the humidity may well be there. As Dawn Zuber, another American Institute of Architects member, points out, if the humidity is removed, the house will feel cooler – which may mean you use the air conditioning less.
A dehumidifier may also protect your collectibles. "I run one in my basement and as long as it takes the humidity out of the air, it's keeping all the junk I am storing downstairs from decaying," Zuber says.
Typical cost: Expect to spend at least $1,000, depending on the system.
Typical savings: It is impossible to say, and it may not be worth the cost. But consider how often you use your air conditioner and how much the stuff in your basement is worth.
The attic. If you're interested in only heating and cooling the parts of the house that you live in, and not, say, the drafty attic you rarely visit, Zuber suggests homeowners seal up the air in the upper part of their homes.
"Have someone go up in the attic and seal any penetrations between the ceiling and the attic, like where the pipes and vents go through, and add spray foam insulation to the rim joists in their basements or crawl spaces," Zuber says. "This is the area above the concrete or concrete block wall, where the floor framing meets the exterior wall. Adding attic insulation also provides a nice return on investment if there's less than 10 inches of existing insulation."
Why is that important? The thinner the walls, the faster heat passes through. The more insulation you have, the longer your house stays warm in the winter, and in the summer, it'll stay cooler longer, since the heat from outside can't get inside as quickly.
If you're really into this project, Zuber suggests hiring an energy auditor or home energy rater to test your house and recommend the most cost-effective insulation and air sealing techniques.
Typical cost: A can of spray foam insulation only costs about $6. Of course, if you hire an energy auditor or home energy rater, plan on spending $400 to $500. And if you send a professional handyman up to the attic with a can of $6 spray foam insulation, you may want to add another $100 to your cost.
Typical savings: Again, it's hard to quantify, but if all you have to spend is $6 on a can of spray foam insulation, and you find even one gap to fill, you'll probably come out ahead.
Cracks under windows and doors and holes near the foundation. Unfortunately, there probably aren't just cracks and gaps in your attic – your basement may have them, too, and there may be spaces around your windows and doors where air is getting in. (If you want to, you could spend a good month or two, and quite a bit of cash, sealing up all the cracks in your house.)
Dean Bennett, who owns Dean Bennett Design and Construction, Inc., a design and building firm in Castle Rock, Colo., suggests looking for gaps in the walls of your basement. "It's very common to have these gaps in houses that are more than 15 years old," Bennett says. "Construction techniques did not involve sealing between the sill and foundation very well. Now, they use a layer of foam between the two."
If you live in an older home, Bennett says you can do yourself a favor by doing a "close visual check" for any holes around your basement or foundation. He says filling in the holes could help prevent hot summer air or cold winter air from filtering into your home – not to mention mice and other critters.
Advertisements will tell you to replace your current windows and doors with energy-efficient ones, and maybe you need to. But many home improvement experts will tell you that if there's a draft, it may be adequate to simply weather-strip your doors and windows.
In fact, "the biggest home-energy and money wasters are windows and doors because of the heat they let out and cool air they let in, depending on the season," says Andrea Thomas, Wal-Mart's senior vice president of sustainability.
Typical cost: The can of spray foam insulation to use in your basement runs about $6. As for weather stripping, the price varies, but a 10-foot strip of rubber window weather stripping can be found at many stores for less than $10.
Typical savings: If you weather-strip, Thomas says the average homeowner can save $160 every year in heating and cooling costs.
Decks. Have a wooden deck? Don't forget to put a new coat of stain on it, once every three years, according to Bennett. "It will weatherproof it as well as make it look better," he says.
Typical cost: Deck stain can cost anywhere from $40 to several hundred dollars. Add a couple hundred dollars if you hire a professional to do it. And if you want to replace a deck, Bennett points out that those made of composite materials don't require staining.
Typical savings: A wood deck that is stained regularly can last 20 to 30 years, Bennett says. "If you never do it, you'll shorten the life of your wood deck by 50 percent or more."
Wednesday, July 24, 2013
Thursday, July 18, 2013
By ROBBIE WHELAN and DAWN WOTAPKA
The nation's biggest publicly traded home builders are on a buying spree, snapping up small privately held companies who made it through the housing slump but now are struggling to find financing.
Big builders are seeing their profits healthy and their homes selling at higher prices. For their smaller, privately owned competitors, times remain tough.
What sets the big builders apart is access to capital. The bond market has been kind to big builders, which issued a record $8.1 billion in bonds last year. Bond issues are on pace to have one of the strongest years ever this year, according to a recent analysis by J.P. Morgan JPM +1.99% .
Private builders have traditionally relied on small or regional banks for funding. But many of those lenders stopped making loans for construction and development during the financial crisis and have been slow to resume. More than 480 banks have failed since the beginning of the downturn, according to the Federal Deposit Insurance Corp.
And lenders haven't been eager to make new loans to the industry: According to the FDIC, the dollar value of outstanding construction and development loans has declined 68% since the peak of the market in early 2008.
Without bank credit, small builders are unable to buy and develop the land necessary to build homes. That has allowed the biggest builders to rapidly gain market share, in large part by acquiring their smaller competition.
"It's getting tougher and tougher for the little guy," said Michael P. Kahn, a building-industry consultant based in Palm Coast, Fla. "The big builders are coming in with big purses and saying, 'Sell me what you've got, I'll write you a check for it.'"
Mr. Kahn, who has advised builders on 96 mergers and acquisitions since 1987, retired from real-estate deal-making in January 2011, but came out of retirement late last year. He has since advised on three deals, and predicts there will be as many as 20 more over the next two years. "The floodgates have opened," he said.
In the past 18 months, public builders have completed at least eight large acquisitions totaling an estimated $1.5 billion, according to Mr. Kahn, the biggest round of consolidation the industry has seen since 2009.
The largest 10 publicly traded builders, which sold 24% of the nation's new homes in 2007, sold 30% of all new homes during the first quarter of 2013, according to aDeutsche Bank DBK.XE +2.85% analysis. Sales of newly built homes were running at an annual pace of nearly 480,000 in May, according to the Commerce Department.
"We have two ways to win right now: We participate in the natural recovery, but additionally, we're picking up market share from a group of builders that isn't able to get financing," said Stuart Miller, chief executive of Miami-based Lennar Corp.,LEN -1.35% the country's third-largest builder.
Since the downturn, Lennar has gained market position in 14 of the 30 markets in which it builds, according to the company. The gains helped drive home-building revenue up 59% to $1.28 billion in its second quarter from the prior year.
Meanwhile, many small builders are fighting to survive. Craig Perry, who built luxury homes for 20 years in Florida, hosted a party last year in Orlando, Fla., at the industry's biggest convention to show off 2012's "Concept Home," with a poolside dining room and an outdoor cabana guest room.
Last month, Mr. Perry sold his company, along with land enough to build 3,200 houses, to Standard Pacific Corp.,SPF +1.63% a publicly traded builder based in Irvine, Calif.
"Our capital is a lot more expensive than the public builders. There is a sense of, 'If you can't beat them, join them,'" said Mr. Perry.
Even some small builders who were able to secure bank loans have decided to sell out rather than continue to compete.
Eric Campbell founded CamWest Development in Seattle in 1990, when he was 25. At the height of the market in the mid-2000s, his company was selling 250 luxury homes per year and bringing in revenue of $160 million.
But starting in 2008, Mr. Campbell said, his lenders began asking him to contribute more cash to each subdivision he was building, eventually as much as half the cost.
For about six months in 2008, he said, he became sleep-deprived from worrying about how to refinance multiple short-term loans he had personally guaranteed.
In 2011, he said, when he tried to buy a piece of land big enough for 81 homes with views of a lake near Bellevue, Wash., his lender asked CamWest to invest $10 million in cash before it would make a loan.
Instead, Mr. Campbell sold his company to publicly traded Toll Brothers Inc.,TOL -1.13% the nation's largest builder of luxury homes. Now a Toll division president, he bought the land in Bellevue and started selling homes there, priced from $1.1 million to $1.7 million, late last year. He said he has hired 25 new employees for his new Toll division, and the sleepless nights are a thing of the past.
"The lending environment for private home builders just doesn't match the business model," he said.
Other big builders have also been shopping. In May, Ryland Group Inc. RYL -0.70%said it was buying Texas-based LionsGate Homes, its third acquisition in a year. D.R. Horton Inc. DHI -2.34% and NVR Inc. NVR -0.05% also acquired smaller players in the last year.
Small builders, many of which turned to private-equity funds for financing during the downturn, are rushing to convert into public companies. Three new builders have gone public since January, and more are expected. The public market gives builders easier access to capital.
New home sales fell 76% between their peak of 1.28 million in 2005 and low of 306,000 in 2011, the worst year on record. Hundreds of small builders failed, but not one of the 10 largest public home builders failed during the downturn that took hold in 2008.
Large public builders survived by writing down a combined $38.9 billion in value from their land portfolios—a flexibility many private builders didn't have—and pushing the government to refund some taxes paid during the boom years to offset losses during the housing crash. That policy, signed into law in 2008, gained the large public builders a combined $7.9 billion, according to Zelman & Associates, a research firm.
"That was a lifesaver for these publics," said Robert Curran, Fitch Ratings' lead home building analyst. "In the absence of these refunds, another four or five might have gone belly up."
Posted by Whilly Bermudez at 9:35 PM