Real Estate New York

Market Update August 2008

President Signs Lifeline: Homeowners, Fannie, Freddie

For those not in danger of foreclosure, the measure means a major step has been taken to uphold the value of the American home and a willingness for the government to take whatever action is required to restore confidence in our country's real estate market.

The law is aimed at stemming foreclosures and halting a free-fall in housing prices by providing federal insurance for refinanced 30-year mortgages for homeowners struggling to make their monthly payments.

The measure also is designed to restore confidence in Fannie Mae and Freddie Mac by tightening regulations and authorizing the Treasury secretary to inject capital into the two biggest U.S. providers of mortgage money. The measure passed the Senate July 26 and the House three days earlier.

The recession in the housing market, the worst since the Depression, along with higher fuel prices and a shrinking job market, is weighing on consumers and the economy.

For those not in danger of foreclosure, the measure means a major step has been taken to uphold the value of the American home and a willingness for the government to take whatever action is required to restore confidence in our country's real estate market.

This is a major concern when faced with the possible loss of foreign investments which have been largely responsible for the low interest rates of the past ten years and the general availability of mortgage funds.

Read more: from Bloomberg.com By Roger Runningen

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Rain Gardens

I used to hate rainy days. The drama of each passing storm escaped me. I'd sulk inside, waiting for the leaden clouds to lift. Then one day, as a nor'easter lashed our Shelter Island, New York, home, my husband, Don, and I watched the storm water come gushing down our gutters, creating a gully as it carried eroded soil down the driveway. We decided to figure out how much water rolls off our roof each year, and where it all goes.

A rain garden in Philadelphia, designed by Edgar David. Rainwater that flows from the house roof to the stone cistern is used to irrigate an intimate collection of woodland plants

Like most people, Don and I didn't think a lot about the earth's hydrological cycle, which supports every terrestrial creature, from human being to towering tree, in the form of rain, fog drip, and snow. Over the ages this precipitation has etched a vast web of watersheds into the planet's surface. However, our huge and costly storm-water infrastructure subverts nature's plumbing system. Rainfall is immediately whooshed from our roofs to gutters and downspouts and channeled by concrete curbs to storm drains and pipes, sometimes in destructive torrents.

In a natural landscape—a forest, say—there's generally very little runoff. The soil and its dense cover of leaf litter and vegetation act as a sponge, absorbing most precipitation. But because we've replaced so much natural groundcover with impervious surfaces, rainfall no longer soaks into the soil as readily as it once did. As a result, huge volumes of runoff flow from countless roofs and compacted lawns down driveways and roads to storm sewers, carrying pesticides, motor oil, and other pollutants to nearby streams and rivers, fouling surface waters and destroying aquatic life through sheer physical force. The U.S. Environmental Protection Agency estimates that a typical city block generates nine times more runoff than a woodland area of the same size. According to the EPA, storm-water runoff is the leading threat to the nation's estuaries and the third-largest problem facing lakes.

Read more by Janet Marinelli from the Brooklyn Botanical Gardens

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Four Things to Know About Home Electric Service

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These days, every house or apartment is going to have an electrical system of one sort or another. Understanding the basics of these systems will help you evaluate homes.

Electricity typically is generated at a power plant and travels to transformers, which lower the voltage to a level that local distribution systems can handle. From there, electricity travels over local distribution systems to individual homes.

One problem in this method of delivery is that quite a bit of electricity is lost in the process of traveling from the plant to its final destination. An alternative is generating electricity on site by solar electrical systems, wind turbines, or generators.

So what else do you need to know about electric systems? While it's best to leave the big questions to electricians, these are some basics that you should know.

Does the home have 220 volt service?

If the home was recently built, the answer is almost always yes. Most houses today have two 110 volt wires and one neutral wire running into the house from the local distribution system. These wires can run underground or above ground. If there are two 110 volt wires running to the house, then the house has 220 volt service and appliances, such as dryers and air conditioners.  

Older houses were usually built with 110 volt service; if the electrical system hasn't been upgraded, it won't be possible to use some models of appliances (though alternatives can be found).

It's possible to upgrade a house from 110- to 220-volt service. How much it costs to upgrade will depend on the particular house and the location. If a buyer is interested in upgrading, an electrician can give an estimate for what the work will entail.

What's the difference between a fuse and a circuit breaker?  

Fuses and circuit breakers are both found in the electrical panel (or sub-panel) of a house. They both serve the purpose of cutting the flow of electricity when a circuit gets overloaded—a potentially dangerous situation. Circuit breakers will be found in most houses built after the 1960s or in older buildings that have had their electrical systems upgraded.  

Fuses have a thin strip of metal that literally blows when there's too much electricity flowing through it. When this happens, the fuse needs to be taken out and replaced.

Since the 1960s circuit breakers have been used instead of fuses. They are more convenient, as they just need to be flipped back on if they are tripped. Unlike a fuse, they don't need to be replaced.

Both circuit breakers and fuses are rated according to how much electricity can flow through them before they trip and shut down the circuit. A 15- or 20-amp fuse is typical for regular light fixtures and such. If the right fuse or circuit breaker isn't used, it can cause a dangerous situation. Clearly, if a fuse or circuit breaker becomes problematic, an electrician should be called in to look at it.

Where's the “main panel?

This is where all the circuits in the house originate from and it's usually near where the electric power enters the building. It will be filled with circuit breakers (or fuses in an older building). The main panel has a rating that determines the total amount of current that can flow out to the circuits at one time before the main circuit breaker shuts the entire system down.

Most moderately sized older houses have 100 amp service, though a smaller house might only have 60 amp service. Larger new houses are often built with 200 amp service to accommodate all the electronics used these days. If a buyer is thinking of adding on to a house or just modernizing an older house, one consideration will be if the electrical system is big enough to handle the additional electrical requirements. It's possible to upgrade the main panel to handle more amps. Again, an electrician can give a buyer an idea of how much work this will be in a particular house.

Are the outlets grounded? 

These days most electrical outlets that you see accept three prong plugs. This means, almost always, that the outlet is grounded. A grounding wire, which connects to the round third hole, protects against electric current escaping from the circuit and causing shocks.

Older houses might only have two prong outlets, meaning there's no grounding protection in the circuits. Upgrading an electrical system to include grounding wires involves opening the walls and can be a significant amount of work. How much work it is depends on the size, construction and layout of the house.

GFI outlets (GFI stands for “ground fault interrupter”) are typically required by building codes when installing an outlet near a water source or a damp location. These are the three prong outlets that have two buttons on them reading “test” and “reset.” Since water and metal handles and spouts conduct electricity, it makes a ground fault particularly dangerous in wet locations such as a bathroom. A ground fault is where the electricity goes astray despite the grounding wire. If this happens the GFI quickly cuts the power. GFI outlets are also called GFCI, or ground fault circuit interrupter.

Knowing how to talk the talk about a listing's electrical system will help to put a little spark in your sales pitch. The important thing to remember is that for a price, electrical systems can be upgraded and expanded to meet the needs of the buyer as well as building code requirements.

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