Essex and CT Shoreline Blog

Waiting For Home Prices to Rise Before Selling? Read This!

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sun, 27 Dec 2009 16:42:09 -0800

Everybody is discouraged by the drop in home prices over the last 3-4 years, especially people who want to "move-up" to a larger home.

Our statistics show that the median selling prices of residential homes in our 24 town area (from Branford to Waterford Connecticut) have dropped 14.1% since 2006 (as of November 2009).

So should you "move-up" now or wait for prices to re-bound to 2006 prices (the same percentage as the decline of 14.1%)?

I've estimated the results of buying now or waiting as shown in the table below:

MOVE UP NOW ?	Current Home	Move-UP Home
2006 Price	$ 300,000	$ 400,000
2009 Price (-14.1%)	$ 257,700	$ 343,600
Purchaser Savings	$ 42,300	$ 56,400
Net Gain for Buyer		$ 14,100
Tax Credit		$ 6,500
Total Net Gain		$ 20,600


WAIT FOR HIGHER PRICES ?	Current Home	Move-UP
2006 Price	$ 300,000	$ 400,000
2009 Price (-14.1%)	$ 257,700	$ 343,600
Future Price (14.1% Gain)	$ 294,036	$ 392,048
Move Up Buyer Gains	$ 36,336
Move up Buyer Pays		$ 48,448
Net Cost for Move up Buyer		$ 12,112

We're making several assumptions including:

1. Current home and move-up home base prices in 2006 ($300,000 and $400,000)

2. That the tax credit will only last until April of 2010 (not renewed).

3. Prices will increase 14.1% in late 2010 or 2011 (at the same percent decline since 2006)

Why is the gain so much larger by moving-up now? Any increase in home prices will be a larger dollar amount using the median price percent change AND we're assuming the government tax credit will be phased out at the end of April 2010.

So now is really a good time to "move-up" to that home you've always wanted!

In addition, you "save" a net $14,100 by purchasing a more expensive home compared to what it would have cost in 2006 PLUS the government tax credit for a total of $20,600.

Buy Now or Wait For Lower Home Prices?

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Thu, 03 Dec 2009 19:36:37 -0800

Home buyers who have been sitting on the sidelines are still asking if they should buy now or wait. Maybe housing prices will drop further?

The fact is that interest rates are currently at an all time low with 30 year fixed conventional rates below 5% with no points (assuming good credit, documented income etc.).

Many buyers have been reading the negative news about the economy and are saying, "I'll bet that housing prices will drop further, maybe another 10%"

So what should you do?

The Fed has been keeping rates low by purchasing mortgage backed securities at the tune of $850 billion so far this year (source: WSJ, 9/25/09). This program is scheduled to end in March of 2010. When this happens, rates are surely to rise.

So let's ask the question: is it better to wait until prices drop another 10% before buying or buy now?

Let the facts speak for themselves:

Low Rate, Buy Now Scenario

Purchase Price: $400,000

Down Payment: $ 80,000

Interest Rate: 5%

Mortgage Payment: $1,717

Wait for Lower Price, buy later Scenario

Purchase Price: $360,000 (10% price drop)

Down Payment: $ 72,000

Interest Rate: 6%

Mortgage Payment: $1,726

So, if you wait until the Spring of 2010 hoping that prices will drop another 10% and (assuming) rates rise 1% (due to the Fed stopping their purchase of mortgage backed securities - or cutting back on their program), you're at the SAME MONTHLY PAYMENT AS BUYING NOW AT THE LOWEST RATES IN YEARS!

Again, we're making a lot of assumptions but it sure gives you something to think about!

So if you're thinking of buying, I'd go ahead now instead of waiting to see what may or may not happen.

We'll revisit this scenario in a couple of months and see if our advise was worth considering.

HDR Photography - a Primer

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Fri, 09 Oct 2009 19:54:40 -0700

I recently joined a local camera club (Connecticut Valley Camera Club) and heard a brief discussion about High Dynamic Range imaging (HDR). The speaker was talking about using this technique to eliminate the light glare that typically occurs when you are shooting a picture inside on a bright day and the outside light forces the camera sensor to under-expose the room resulting in a very dark interior.

This is an inside photo that illustrates the difference between a normal "auto-exposure" and an HDR process photo:

"Normal" Interior Photo - note dark interior

HDR Processed Photo (below)

This technique also works with exterior photos as can be seen below (note washed out sky and bright washed out area on left side):

HDR Processed Photo (below):

To learn more about HDR photography, just go to the HDR Photography Group on Active Rain - there's lots of good articles there to provide you with more insight into this remarkable technique.

Tip: you need a camera that can easily make multiple exposures (typically -1, zero and +1 stops or more) and a TRIPOD IS A MUST.

Then you will need a computer software program that can process the photos. There are several available - I've used Photomatix available from HDRsoft at this web site: http://www.hdrsoft.com/ (approx. $99.00)

Check out their web site and let me know if you are impressed!

Buyer hesitates - squeak - squeak - glare - Now What? (Case of the Squeaky Floor)

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Wed, 10 Jun 2009 19:29:01 -0700

Have you ever had a buyer who walks on a floor that squeaks and steps back and forth - squeak - squeak - and then glares at you as if to say, "who built this house?" or "I can't stand squeaks" or "I'll negotiate this deal starting with shoddy construction".

I've got a solution that has a very good chance of eliminating all the under-carpet squeaks and the home-owner can "do it himself".

I don't often promote products on my blog but this one works so well (from personal experience) that I thought I'd pass along the tip.

The product is called "Squeeeek No More®" from O'Berry Enterprises, Inc., Ringwood, IL. It's a kit that can be ordered on line or from your favorite hardward store - the Ace Hardward store near me knew about the product but had to order it - it came in three days and I saved on the shipping costs.

I've found it works best on carpeted floors that have a plywood base. When my wife and I built our house 9 years ago, there were no squeeks but over the years, several appeared in the high traffic areas of our master bedroom.

I first read about the device in "This Old House" magazine and after reading the review, went ahead and ordered the kit. You can view a video explaining how the system works at http://www.floorscrews.com

As you can see from the video, the kit consists of (1) a triangular jig that makes it easy to stop drilling the screw into the carpet a just the right depth to secure the sub-floor to the floor joist yet not protrude above the plywood and leave a sharp screw end (2) A special drill bit for the screw and jig (3) 50 special scored screws approx. 3" long that allow you to break off the screw after drilling into the carpet and plywood and floor joist.

There's even a special joist finding screw that you can use to accurately find a floor joist to drill into - and that's key because you need to fasten the plywood into the joist.

I found that I needed about 30 screws (out of 50 supplied) to completely eliminate all the squeaks. Since the floor joists are supposed to be 16" on center, all you need to do is carefully measured from a known floor joist to the next, and place screws about 4" apart until the squeak disappears and just like majic, you've eliminated an annoying noise that could kill a deal or at the least, make you and your buyer uncomfortable - you don't need a buyer focusing on a squeak when it can be fixed for less than $25.00.

The kit can be purchased from Amazon: http://tinyurl.com/n6cw7z

Supply and Demand - we're in "Over Supply"

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Tue, 12 May 2009 16:05:54 -0700

The absorption rate (number of months to sell existing housing inventory) tells us something about supply and demand. Studies have shown that a "normal" balanced market should have an absorption rate of about 6 or 7 months. So where are we now? Based on statistics from our local MLS which includes 24 towns along the Connecticut shoreline, our absorption rate (residential, single family homes, all price ranges) is a whopping 18 thus far in 2009. Compare that to the last 4 years, and you can see the problem.

Absorption Rate (Months to Sell Existing Inventory)

Does that mean that prices are too high? Does that mean that buyers are waiting on the sidelines? Does that mean that buyers can't get mortgage loans as easily as before? Most likely, all of the above.

Clearly, higher absorption rates mean that the supply of homes is higher than normal which means that either

(1) home prices need to come down more so that sales will increase and reduce the inventory or

(2) the number of new listings coming on the market needs to be reduced.

Either way, it's not an easy path to a balanced market.

News Headlines - A Sign of Better Things to Come?

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Fri, 10 Apr 2009 19:14:18 -0700

For months now, many have blamed "negative news" as one factor that is adding fuel to the economic slump. When we hear "doom and gloom" day after day, it has an affect on all of us. Then we open our monthly investment statement (if you have any money in the stock market) and it gets even more depressing.

So when will we see a recovery?

Earlier today, I was reading the Wall Street Journal and noticed several "positive indicators" by just reading the headlines alone. Here's an example of five that caught my eye:

1. Upbeat earnings forecast from Wells Fargo

2. Goldman Sachs seeks New Stock Sale

3. U.S. Exports rose in February

4. Economists See a Rebound in September

5. Signs Point to Stabilizing economy

6. Retail Sales Slip but Profit Outlook Perks Up

Not bad for an economy in a recession! I'm planning to check once a week or so to see if headlines continue to look positive (at least the majority of headlines).

This isn't a scientific or statistical survey, just an opinion. Oh by the way, our office has been busy with buyers and sellers over the last 4-6 weeks - and that's a real sign that things are looking up.

After all, if we're all continue to talk about "positive news" and "business continuing to grow" it might just result in a self-fulfilling prophesy!

Water Freeze Damage Disclosed! Now What?

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sat, 28 Feb 2009 19:58:26 -0800

When showing a buyer a couple of foreclosed properties recently, the listing agent disclosed that there was prior "freeze damage" - read - burst water pipes due to water freezing.

This is often common in unoccupied homes and during the foreclosure period where the owner is not only unable to pay the mortgage but also, unable to pay utility costs - no electricity: no power to the furnace or to the baseboard heating system.

So when the temperature goes below 32 degrees for an extended time - pipes burst - even when the water has been turned off and "drained" - why, because you can't really completely drain a typical house - it's not set up like a beach house where winterization happens every year.

So then, when you're representing a buyer and freeze damage is disclosed, how do you advise your client? Don't even try to do this yourself!

A good plumber or contractor can inspect the plumbing and make an estimate of the extend of the damage - often they drain as much water as possible from the system and then use high pressure air to find out where the leaks are located. With a hot water heating system, this can be a real challenge - with hot air or electric baseboard heat - you're only concerned about the water pipes.

Then once your inspector has provided his analysis - you have a professional's opinion on the damage and the mitigation.

In the case of my client, the estimate was $6,000 to $8,000 to replace all the damaged copper pipes. It can be negotiated but usually you have a weak position because the seller has disclosed this defect and subtracted repairs like this from the price (usually heavily discounted).

So go ahead, show foreclosed properties and if freeze damage is disclosed - get an estimate of any repairs - if it's not disclosed and there's no heat in the house - make sure you write a contingency to have the plumbing system inspection. Then you're in a good position to negotiate and have the seller make the necesary repairs.

Need More Money for a Downpayment? Try your 401K!!

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Wed, 25 Feb 2009 19:22:10 -0800

Recently, a buyer made an offer on one of my listings and a day before the mortgage commitment date, it was reported that the buyer needed more cash for the down payment. Seems the loan program he signed up for went away! In today's tough financing environment, I'm sure that this is not the first time that this has happened.

Where to get some cash? Borrowing from friends or relatives? (risky); Getting someone to co-sign? (may end a long term friendship); Borrowing from your 401K retirement account? (Maybe not a bad idea!!)

Yes, the IRS does allow a "hardship distribution" from a 401K retirement plan (if allowed by your employer). For this to work, the distribution needs to be "an immediate and heavy financial need" and for "costs relating to the purchase of a principal residence" (among several options).

Also, once the distribution is made, the employee can't make new contributions for 6 months and unlike a loan, hardship distributions are not re-paid to the plan - your plan balance is permanently reduced.

Disclosure: I'm not a tax attorney or CPA so please check with one of these professionals for an opinion before taking any action on this approach!

Here's an excerpt from the actual IRS web site's FAQ's (underlining is mine for emphasis):

1. Under what circumstances can a participant get a hardship distribution from a retirement plan?

A retirement plan may, but is not required to, provide for hardship distributions. Many plans that provide for elective deferrals provide for hardship distributions. Thus, 401(k) plans, 403(b) plans, and 457(b) plans may permit hardship distributions.For a distribution from a 401(k) plan to be on account of hardship, it must be made on account of an immediate and heavy financial need of the employee and the amount must be necessary to satisfy the financial need. The need of the employee includes the need of the employee's spouse or dependent. (Reg. §1.401(k)-1(d)(3)(i))

Under the provisions of the Pension Protection Act of 2006, the need of the employee also may include the need of the employee's non-spouse, non-dependent beneficiary.

Whether a need is immediate and heavy depends on the facts and circumstances. Certain expenses are deemed to be immediate and heavy, including: (1) certain medical expenses; (2) costs relating to the purchase of a principal residence; (3) tuition and related educational fees and expenses; (4) payments necessary to prevent eviction from, or foreclosure on, a principal residence; (5) burial or funeral expenses; and (6) certain expenses for the repair of damage to the employee's principal residence. Expenses for the purchase of a boat or television would generally not qualify for a hardship distribution. A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee.
(Reg. §1.401(k)-1(d)(3)(iii))

5. What are the consequences of taking a hardship distribution of elective contributions from a 401(k) plan?

After an employee receives a hardship distribution of elective contributions from his or her 401(k) plan, generally the employee will be prohibited from making elective contributions and employee contributions to the plan and all other plans maintained by the employer for at least 6 months after receipt of the hardship distribution.
(Reg. §1.401(k)-1(d)(3)(iv)(E)(2))

Hardship distributions are includible in gross income unless they consist of designated Roth contributions. In addition, they may be subject to an additional tax on early distributions of elective contributions. Unlike loans, hardship distributions are not repaid to the plan. Thus, a hardship distribution permanently reduces the employee's account balance under the plan.

Here's a link to the IRS web site with complete details:

http://www.irs.gov/retirement/article/0,,id=162416,00.html

Essex Winter Series - A Jazz Delight

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Tue, 17 Feb 2009 19:38:19 -0800

It's been a week or so since I attended the second of five concerts in the 31^st annual Essex Winter Series. Even though living in Essex for 8 years, I just never heard about the Winter Series and didn't know anyone who attended

When I first received complimentary tickets (my company is a sponsor) to the "great jazz" concert, I was apprehensive - who are the musicians? What is the program? What a surprise!

I quickly found out (after reading the program briefly before the program) that is was no ordinary concert: Jeff Barnhart, piano, Scott Philbrick, Trumpet, Dan Levinson, Clarinet and five other WORLD CLASS musicians and entertainers.

The program focused on the early Jazz years from 1890 to 1935 and the first number "Twelfth Street Rag" blew me away - truly outstanding Jazz right here in our small town and very reasonable ($20.00/ticket). The concert was even more appealing as I used to play the piano and enjoyed playing ragtime music - it sure brought back memories.

During Intermission, there were several CD's for sale in support of the musicians (I purchased "Ivory and Gold" by Jeff Barnhart and "Twin Pianos" by Jeff Barnhart and Louis Mazetier - both great albums).

So what's up next? It's not all Jazz, they'll be a mix of opera, and classical for the next three concerts ending on March 22.

Can't wait to hear the "String Orchestra of New York City" who claim "No conductor, no bow ties, just strings"!!! A total of 12 young, highly talented musicians to provide "big city" entertainment on Sunday, March 1 at 3:00pm at the Valley Regional High School - why not make plans to attend - most likely you'll be just as surprised as I was on my first concert. You can purchase tickets at the door or write "Essex Winter Series, P.O. Box 383, Essex, CT 06426.

Essex Ed: Realtor or Ground Hog?

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Mon, 02 Feb 2009 19:42:46 -0800

When I first moved into town and got into real estate, I thought it would be good to have a catchy screen name that would be easy to remember. Since my name is Ed and I live in Essex, why not "Essex Ed". I even bought the domain name which is still active and directs people to my web site.

Then at the first Saturday in February, I learned that "EssexEd" was the name that the town gave to a 15 foot high fiberglass image of the town mascot: a groundhog.

So every year, the town sponsors a parade in honor of ground hog day and everybody walks through town banging on pots and pans and yelling so the groundhog will emerge from his hole (I've never seen a live groundhog in Essex!).

Last year he was decorated up as a "birthday boy"

This year, the theme was "the Beatles" and Essex Ed was decorated and crowned as a 5^th member of that famous group

So maybe my screen name wasn't such a bad idea - who would have thought that I was a famous figure in town!

Customer Says Buy, I Say Whoa Nellie

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sun, 25 Jan 2009 18:30:11 -0800

Recently, a customer found a house on the Internet that was bank owned, partially constructed, and badly in need of repair. When we made our first visit to the house, he liked the house a lot and his wife loved the location and the room layout. That's about all that was good about the house - it had burst water pipes, visible mold on the drywall in the lower level, and an addition that was equal to the size of the original house but partially completed (no drywall, no electrical or plumbing).

Sure, it's a buyer's market and there are great deals out there but is this the time to say "no". Especially when your client says, "what do you think?" Is it a money pit or an opportunity? If you say, "great buy" and during repairs, who knows what lies behind the mold and discoloration? Maybe water damaged wood; maybe burst water pipes; maybe termites; maybe ?????

If you say, "it's a money pit; lets keep looking" who knows how many more foreclosures you will need to show your client and what are the chances that the next one will be any better.

Well, we moved forward and hired a building inspector, plumber, and contractor to give us their opinions - surprise - most of these guys have seen it all, especially if they have been in the business for a few years. The plumber gave us a good report - not that costly since the house has electric heat - maybe $6000 to repair any broken pipes and replace; the building inspector said, "You've got a great house her - lots of potential". The contractor gave us a bid for total re-hab and it seemed better than we thought.

That's all I needed to get my confidence together and keep the deal alive. It definitely takes VISION - along with support from other professionals. What's the outcome on this deal? Don't know yet, closing is in a month and then we'll find out the real truth -

A Green Planet Starts with a Green Town

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sat, 13 Dec 2008 16:32:34 -0800

In previous blogs, I talked about my Ecobroker Certification and how this has had an effect on my involvement in local community here in Essex, CT

Went to my first Essex Town Planning Commission meeting as an interested citizen and member of the "Essex Committee for Clean Energy". My purpose was to support our committee of 5 to promote both an Energy Policy and a Climate Action Plan for our small town (6,000+ people).

Our committee has been working hard to find out how to get started and to convince our town to move forward on making our town "Green". There are two initiatives:

1. Connecticut Clean Energy Options Program: The CT Clean Energy Fund is behind this Community program that rewards cities and towns who meet certain requirements: Once certain milestones are met, the clean Energy Fund will provide a 4kW Solar system for one of their town or school buildings

2. Cities for Climate Protection: To start, our town has joined ICLEI (International Council for Local Environmental Initiatives) with our encouragement and promotion. One program that is part of ICLEI is Cities for Climate Protection (CCP) where cities pledge to reduce emissions of greenhouse gases that cause global warming. The organization provides guidelines (Called the Five Milestones) for towns to use.

At our town meeting last night, one of our members explained our objectives and the Planning Commission appointed a sub-committee to work with us to move forward with both initiatives!

If you're confused with this energy talk, you're not alone. It is a monumental task to make progress in this area - often the town Planning and Zoning Boards are spending the majority of their time with day to day applications for building re-construction and additions or modifications of existing homes.

Once we get started with the town committee, I'm sure things will move along - especially when the Planning Committee finds out how much energy they can save and how much $$$

Market Statistics for SE Connecticut Through Nov 2008

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Fri, 05 Dec 2008 17:15:24 -0800

For this time period, the number of sales (closings) decreased slightly but the absorption rate INCREASED from 10.6 to 17.5 (months to sell existing inventory -- a change of +65.1% compared to the same period last year). We compared MLS data from 22 towns along the shoreline from Branford to New London. As for PRICES (median price) there was only a 2.8 % decrease comparing 2007 with 2008 (from $380,842 to $370,280).

A summary of residential real estate statistics through Nov. 30 2008 for 22 Shoreline towns (from Branford to New London) are shown below:

Residential	2007	2008	Percent Chg
Closings	1239	873	-29.5%
Days on Market	95	100	+5.3
Median Price	380,842	370,280	-2.8
Active Listings At Month's End	2000	2069	+3.5%
Absorption Rate*	10.6	17.45	+65.1

*Number of months to sell existing inventory.

Closings: Residential (by home selling price)	2007	2008	Percent Chg
0 to $399,999	746	568	-23.9%
$399,999 to $599,999	280	184	-34.3%
$600,000 to $799,999	115	61	-47.0%
$800,000 to $999,999	40	26	-35.0%
$1,000,000 +	58	34	-41.4%

Looking at closings at various price levels, we find that home sales (closings) had the largest decreases in the higher price ranges ($600K to $800K range and above $1 million). These numbers were similar to the October 2008 statistics report.

Economists Predicting Housing Prices? That’s scary!

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Tue, 02 Dec 2008 21:12:06 -0800

When ever I read an article in a national newspaper (like the Wall Street Journal) about real estate, I pause and count to 10 because my clients may be reading the same article and draw the same conclusions – after all, the writers are talented journalists who do extensive research and write informative articles that apply to their readers – the whole country!!

What’s the problem? Real estate is a regional, localized business that changes from town to town within the same county!

Let’s look at some of our local statistics in southern Connecticut. For the 22 towns in my service area, median sale prices changed (comparing 2007 to 2008) from minus 35.3% to plus 4.1% with an average change of minus 2.7% ($380,842 to $370,644).

For days on the market, the range is from minus 31.9% to plus 70.4% with an average of minus 9.2% (from 97 days on the market to 106 days on the market) for all 22 towns. Holy smokes, batman, that’s a lot of variation in a small geographic area; imagine the variation in the whole region or state!

The Wall Street Journal article (Page R1, Dec 2, 2008) continues, “…Economists and other pros generally say home prices won’t bottom out before the second half of 2009” and “…the experts say, you should generally expect house prices to rise just a bit more than inflation and roughly in line with household income”

Later in the article, they talk about demographics and their effect on home prices – two economists predicted in 1989 that demographic trends would lead to a substantial fall in …….…home prices over the next two decades. What actually happened is that average U.S. home prices increased 35%.

My advice, don’t wait to buy or sell, if you’re ready, move ahead. Getting wrapped up in what the pundits say will only confuse you.

Key questions to ask yourself:

1. Is your job secure? Is the job market in your city stable?

2. Do you have a small amount of debt (less than 38% including any current mortgage principal, interest, taxes and insurance)?

3. Do you have sufficient savings for a 10% or 20% down payment?

4. Are you planning on living in a new house for 3-5 years?

5. Do you have a good credit rating (620 or above)? Just a sampling of some of the critical questions you should consider – a good mortgage broker or bank can tell you what programs would be best for your situation.

If you’re ready, go ahead; make your dreams become reality; put your house on the market; move to that water view home that you’ve admired over the years; when you see a path in the woods that bends to the right, go left and leave a path for others to follow!

Global Warming and Your Local Community - Get Involved!

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Thu, 20 Nov 2008 08:07:25 -0800

Concerned about global warming and the effects of green house gas (carbon dioxide) emissions on our atmosphere? Want to get involved with the local community and be on the cutting edge? Here's your chance!

It's been reported that the Obama administration's second highest priority (after fixing the economy) is to enact greenhouse-gas legislation (article in the Wall Street Journal 11/20/08, page B1). Here's an opportunity right here in your own community, right now!

The town of Essex, CT has voted to join an International Environmental Organization called ICLEI (Int'l Council for Local Environmental Initiatives). This group provides extensive resources and guidelines to assist towns (and businesses and residents) in measuring and reducing emissions of greenhouse gases (mainly CO2) and air pollutants.

As a member of ICLEI, the town of Essex will receive computer software (to collect information and create an inventory database), special training, planning guides and extensive resources to assist the town in forming a "Climate Action Team".

In addition, ICLEI hopes to have a program (next year) that will allow towns to become "sustainable communities". The work done by the Climate Action Team will greatly assist the town in being one of the first in the area to meet this standard.

This is where YOU come in! The first step is to get a committee of residents together to administer the program - VOLUNTEERS NEEDED!! If interested, please contact the Essex Clean Energy Committee or sending an e-mail to info@essexcitizensforcleanenergy.com or simply comment on this blog entry. I'm sure that other communities are looking for volunteers to participate in this worthwhile movement. Get Involved!

Market Statistics for SE Connecticut Through Oct 2008

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Wed, 12 Nov 2008 14:15:20 -0800

Fewer home sales (closings) and a longer absorption rate (number of months to sell existing inventory) are the two statistics that show the largest decrease through October comparing 2007 and 2008. We compared MLS data from 22 towns along the shoreline from Branford to New London and discovered that PRICES (median price) only decreased 2.7 % (from $380,842 to $370,644).

A summary of statistics through October 2008 for 22 Shoreline towns (from Branford to New London) are shown below:

Residential	2007	2008	Percent Chg
Closings	1053	763	-27.5%
Days on Market	97	106	+9.3%
Median Price	$380,842	$370,644	-2.7%
Active Listings At Month's End	2154	2251	+4.3%
Absorption Rate*	10.3	14.16	+27.2%

*Number of months to sell existing inventory.

Closings: Residential (by home selling price)	2007	2008	Percent Chg
0 to $399,999	626	487	-22.2%
$399,999 to $599,999	238	169	-28.9%
$600,000 to $799,999	104	52	-50%
$800,000 to $999,999	34	25	-26.4%
$1,000,000 +	51	30	-41.1%

Looking at closings at various price levels, we find that home sales (closings) had the largest decreases in the higher price ranges ($600K to $800K range and above $1 million).

Buyers waiting....waiting...waiting

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sat, 08 Nov 2008 20:31:32 -0800

About 3 weeks ago, I received e-mails from 3-4 buyers saying that they were going to put their home searches on "hold" to wait out the financial crisis. From the shortness of their comments to the tone of their words (not sure about my company's future; may need to save more for a down payment; concerned about their credit, etc.). There's no doubt that everybody has had an emotional roller-coaster along with the movement of the stock market! Worry, despair, anger, panic, anxious, helpless ------these are all emotions that many of us (clients and agents) have experienced over the last few weeks.

In the beginning, I wrote back to my clients and said, "yes, I understand, you are making the right decision, hold off, don't sell your home; don't look for a new purchase". Everyone I talked to was saying, "I'm cutting back on expenses... my 401K has dropped 25% ... I might need to continue working after 65 etc.

Then it hit me; everyone was watching TV and reading the news about how bad it was; like watching an exciting football game - your body reacts to the stimulus and your emotions go from "calm" to "panic" in a matter of seconds!

We're in difficult times but that doesn't mean that everybody needs to put their lives on HOLD!

Now I tell buyers, yes I understand your reluctance to move forward but this is a good time to buy - "what" they say? - "Yes", I say, there are good deals for buyers - if you have saved for a down payment, and if you have good credit and if you find a home that you love, why not move forward?

What if you are a motivated buyer who has a need to move (new job potential; retirement, downsizing, upsizing, etc.) why wait? This is where we as agents need to do our homework - to provide the knowledge that the client needs, to answer all their questions and help strengthen the housing market!!

Yes, I truly believe that the sooner buyers who are on the fence move forward and the sooner more sellers put their homes on the market, the sooner we'll get back to a more "normal" real estate market.

Good Timing for "Kill A Watt"

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sun, 26 Oct 2008 19:28:58 -0700

Everybody is watching their energy costs these days and your electric bill is no exception. I read about a gadget (called a “Kill A Watt”, model P4400) that you can plug into a wall outlet and then plug the device into the Kill A Watt and read the watts being consumed by the device.

For example, I plugged my laptop into the gadget and found that it uses 25 watts (without charging the battery). If I estimate that it’s plugged in for 6 hours per day, for a 30 day month (180 hours) gives 180 x 25 = 4500 watts or 4.5 kilowatts. Using my typical electrical rate on my monthly bill of $0.19/KWh we find that it costs $0.85 PER MONTH to run my laptop – not a big deal!!

What about my desktop? Using a time of 12 hours per day with my desktop, monitor, router, printer, scanner connected, it showed 180 watts on the Kill A Watt meter ($12.48 per month). Maybe I don’t need my desktop computer on 12 hours per day!! As you would expect, my basement dehumidifier costs $20.81/month with a 12 hour timer (two hours on, two off). So I’m glad when winter comes and I don’t need to use it. Cost of the device? Less than $25.00 (I got mine from Amazon for under $20). In these times of high energy costs, it sure helps to keep tabs on the true electric costs of running your devices.

What's this got to do with Real Estate? Well, it would make a great closing gift to a new buyer to help them do an audit of their home and allow them to save money by reducing their electrical usage! The device doesn't work with lights that have switches, but you can easily calculate the wattage because it's on the bulb - the new CFL bulbs are a real money saver.

Life After Ecobroker - A Step Into the Community

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Tue, 02 Sep 2008 21:29:59 -0700

Having completed the Ecobroker course, I became interested in what the community was doing to promote green building and clean energy. After a Google search, I found that there is a committee in my own town (Essex Committee for Clean Energy, ECCE) and that they were looking for members! It turns out that they are promoting clean energy in our community and are marketing to residents to sign up for the clean energy option with our local utility company. Once your town pledges 10% clean energy by 2010 The State of Connecticut has a "Clean Energy Fund" that offers any town a 5 kw solar power system for every 100 people that sign up for the Clean Energy Option - which adds $6 to $8 per month to your utility bill to support energy from hydro, wind and methane gas emmissions. I learned that we reached 100 sign-ups about 6 months ago and the state funded a photovoltaic system on a building at our recycling center.

If your town has not committed to the clean energy initiative, why not find let your selectman know about the program. There are plenty of web sites that can be used as a reference; I suggest you start with the following link: http://www.ctcleanenergy.com/Home/tabid/36/Default.aspx and learn more about what your town can do to make our planet a better place to live.

Ecobroker® Course - Lesson's learned

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Fri, 27 Jun 2008 20:49:22 -0700

Now that I've earned my EcoBroker® designation, now what? There's a lot to learn from the Ecobroker® course, but one thing you don't learn is to be an expert on the environment or an expert on energy efficient windows, or what heating system to use for maximum efficiency, or how to best insulate your home, etc. etc. Here's my top 5 lessons learned:

1. Study and be able to help clients consider and understand payback periods and life cycle costs of energy saving products. An additional $1000 up front cost (for an energy saving feature) that has a payback period of 2 years could provide cash benefits for years. Isn't this how to sell benefits?

2. There are many government and utility incentives available to help consumers purchase more energy-efficient products - knowing what is available in your local area gives you a big advantage over your competitors.

3. Be aware of misperceptions of commonly overused and misused terms like "environmentally friendly". No one verifies this label. Be more specific by saying something like, "this home was constructed with windows having low-e coatings and has been upgraded with Energy Star appliances".

4. The best way to sell anything is by using "real life" examples. Promoting energy saving features is no different. For example, help consumers calculate life-cycle costs. If you see a solar panel on someone's home, stop by and talk to the owner; ask if you could bring clients to visit (provide a gift certificate and you might just get a referral!) and learn first hand how the system has saved energy and operating costs.

5. Homeowners place high value on cost savings, the environment, comfort and health. Of these four, comfort and dollar savings are the most tangible benefits for them. Focusing on these four areas can make you a "socially responsible" real estate agent and help you stand apart from others that have not had the Ecobroker® training.

Has anyone else earned the Ecobroker® designation? Any comments? The web site is www.ecobroker.com

It's Race Time

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Mon, 19 May 2008 18:55:15 -0700

First Race of the Season! Every year I can't wait for some warm weather so that I can start running OUTSIDE without leg warmers, gloves, ski hat and a jacket. Over the last 3-4 years, I've stayed inside during the winter and used the treadmill at the gym to keep in shape. Now that I've been running outside 2-3 times a week, for the last month, I decided it's time for a RACE! It happened this past Sunday at 9:00am at Jacob's Beach in Guilford, CT! Since there were only about 200 runners, I expected to do well in my age group - boy was I wrong! I came in 9^th of 12 and the winner (in my age group) ran the 4 mile race in less than 7 minutes a mile! I can't complain, however, since I averaged 8:45/mile, about the same as last year.

How does this relate to real estate? Well, for me, a lot! About 3 years ago, I attended a Hobbs-Herder course in Washington, D.C. and learned the importance of branding - starting with a personal brochure. After writing several drafts of different themes, I decided to use running. We first had a brainstorming session with my running group and one of my friends said, how about "Ahead of the Pack" and so it stuck - my tag line- I've used this in my brochure, postcards and other advertisements.

To quote from my brochure, "Having a regular running activity and a group to inspire him brings a great deal of insight into Ed's successful career as a real estate professional. Self-motivation and determination are traits that are necessary to maintain a steady exercising regiment. Ed works the same way in real estate."

So my question to you is "what interest or hobby can you use to create interest and tell a story about the type of person you are?" This is not a hard sell approach that may agents use but a personal story that a prospective client may think "Now that's an interesting person that I'd like to meet someday" So change what you're writing and try creating something personal - it might just work for you.

Should You Be an "EcoBroker"?

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Mon, 25 Feb 2008 19:02:08 -0800

When I started collecting articles a year or so about green homes, I never imagined that there would be such a huge growth in consumer interest in this subject. Now, just about every other week, there's an article in our local paper or magazine about ways to make your existing home more energy efficient or builders that are building green homes.

Then I visited the web site http://www.ecobroker.com/ which is a product of EcoBroker International. The web site describes an on-line course that agents can take to be "ecobroker certified". But wait, NAR and our CT Association of Realtors has not "endorsed" the program, and no CE credits are given - they currently don't offer anything like it.

So the question is, should you sign up and pay the $399.00 or wait until NAR or CAR or your state organization offers an eco broker type course? For me, I decided to go ahead and have started taking the course - it's in three sections (abbreviated from their trademarked names):

1. Environment 2. Energy 3. Green Market

What do I think so far? It's a lot like the e-Pro course - a lesson with field trips, a quiz and homework. Very well done, so far.

What do I expect? I'd like to find more about the energy area and how a house gets a "LEED" rating; how can you demonstrate the advantages of a solar hot water heater ($ saved compared to non-solar), etc. etc.

In the meantime, check out the 57 page "Your 2008 CT Energy Guide" made available on http://www.conservationeducation.org/. It's possible that other states have a similar publication. The course is loaded with similar links that can be saved for reference. I found out that my town even has an organization with a web site on the subject: http://www.essexcitizensforcleanenergy.com/

I'd be interested if anyone else has taken the EcoBroker course and their comments.

A Hubbard is a Hubbard is a Hubbard

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sun, 17 Feb 2008 19:51:24 -0800

I recently had a buyer who was interested in purchasing a house but needed to sell their house before they could buy (a Hubbard Contingency). Sure, they could get a home equity loan or bridge loan but didn't want to risk being stuck with owning two houses.

In this buyer's market, sellers are more willing to accept this contingency but watch out for a "domino" effect: many contracts do not limit the progression of Hubbard contingencies!

In the case of my buyer (#1), they had a Hubbard on the house that they wanted to buy. Within a short time period, a buyer (#2) came along and made an offer to buy their house with a Hubbard contingency on the offer!

Then buyer #3 came along about a month later to purchase buyer #2's house without a house to sell (finally).

Talk about a tense situation! As the date of the Hubbard contingency approached for buyer #1, inspections on buyer #2's house were not yet resolved.

Three homes were dependent upon one inspection resolution!

Fortunately the inspection issues were resolved, the mortgage contingency met and both houses were sold so that buyer #1 could then go ahead and buy their dream house (a total of 3 houses in the chain of events).

Sound complicated? You bet.

What to do? Consider asking your seller, who signs a Hubbard contingency, to include a clause in the contract to say that they will accept the contingency IF THE BUYER WILL AGREE TO ACCEPTING OFFERS ON THEIR HOUSE WITH ONLY INSPECTION AND MORTGAGE CONTINGENCIES!!

If you don't stop at the FIRST Hubbard contingency, you could find yourself in a situation with 2 or possibly 3 back to back and several homes dependent upon the home at the end of the chain to sell.

You don't want your sellers to sit on pins and needles all this time - moving is stressful enough without a "Double" or "Triple" Hubbard Contingency.

Eagles In Connecticut? It's an Annual Event!

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Sun, 10 Feb 2008 21:22:24 -0800

We are pleased to have the Eagle Festival again this year in Essex, sponsored by the Connecticut Audubon Society. Yes, you heard right, the Eagle Festival with real, live, wild American Eagles, within view of the naked eye (but better with binoculars or spotting scopes). For more details go to: www.ctaudubon.org/about/eaglefestival.htm

The weekend is filled with seminars, bird carving, live bird demonstrations, art exhibits, horse and buggy rides, and talks on conservation. It's a great way to brush away the winter doldrums and learn something new. Even if you're not a birder, you can enjoy many of the fun filled activities. Celebrities? You bet, Phil Donahue and Faith Middleton ( a local TV personality) are the honorary co-chairs.

Bring the kids - there are story times, photos with a live raptor, and a model train show.

But what about the weather? Sure, it's cold this time of year in Connecticut (the last two years, it was in the 20's) but never fear, they have heated tents for the talks and demonstrations and you can stop in the stores and the Connecticut River Museum to get warm.

When? It's this weekend, February 16th and 17^th, 2008. So bundle up, clean your camera and binocular lenses and head for Essex for a great time! To learn more about Essex, "The Best Small Town In America", visit: http://www.essexct.com/

And don't forget to stop by the welcome center at Page Taft GMAC Real Estate on 35 Main Street and say hello!

I'm Making A Six Figure Income (I wish)

Edward McCaffrey, ABR, GRI, e-PRO (Page Taft Real Living) — Thu, 17 Jan 2008 20:12:50 -0800

Years ago, in a former career, I made weekly trips with co-workers making sales calls on our major customers in the Midwest. My job was to offer technical support to the sales force. We often would propose questions to each other to stimulate our minds and pass the time as we were driving 100 or so miles each day.

On one of these trips, one of our salesman said to me, if you had $1,000,000, what would you do? Would you continue working? Would you change to another kind of work? Would you quit work and do charitable work?

Then we both decided that we would continue working on the jobs we had because we liked what we did and liked the company. Then we asked, "Would our job behavior change?" We both concluded YES, our behavior would change, and for the better; we both would be better employees! Why: because we would be doing what we believe is the right thing to do!! So then, the salesman said to me, what if we ACT as though we have one million dollars!!

So what does all this mean to the real estate business? Just this: If we ACT as if we are making a SIX FIGURE income, what would we change? And would we be more successful? Here are some suggestions:

IF I WAS MAKING A SIX FIGUE INCOME, I WOULD:

1. Not take every listing that came along, just because you need the money. Everyone knows what I mean, the listing that you don't want because its 40 miles from your office and the owner insists that you be present on all showings and you're spending a fortune on gas! And it's a referral and the fee is 35% and so on and so on.

2. Dress like a top producer - for me, I'd probably wear a sports jacket more often; for women, maybe a fashionable dress rather than a casual look.

3. Keep my office and car looking sharp. Ever notice that top producers drive cars that are always "car wash" clean all the time?

4. Work with buyers that agree to work with you (in our area, sign a buyer agreement) and drop the others and don't take buyers who want to look at property 60 miles from your office.

5. Spend more time having breakfasts and lunches with old friends, past, current and potential clients. The same for business partners, mortgage brokers, home inspectors, attorneys. What if you did something unusual like buy them lunch? Don't you think they would tell their friends, hey, Ed's doing well; he just picked up the tab for lunch? What do we do now? Oh, we don't' have the money to buy lunch two or three times a week.

I could go on and on but my conclusion is that if we act like we're top producers - it's possible that we'll be much more productive, more efficient and before long, earning that six figure income.