SunWest, REALTORS®

Even with Memorial Day thrown in, this has been an interesting week. We managed to get a foreclosure stopped on Tuesday while we are working on a short sale for the homeowner. The foreclosures in Texas are the first Tuesday of the month regardless if it’s a holiday or not.

We also started work this week on another short sale that we will be marketing soon. On Thursday, we had an opportunity to advise a homeowner about the repairs and remodeling he should do to his home to maximize his sales price. We discussed the items that would give him a return on his investment and remodeling hints that would just help the home to sell quicker.

We assisted two other clients (and two husbands) by referring them to a contractor that could do some of the more heavy duty “honey-do” lists that their wives had developed. The husbands were tickled with the contractor’s price and the fact they did not have to climb a ladder, go up on the roof or in the attic in this heat!

In addition, we walked a young couple through their first house purchase explaining the process and advising them exactly on the correct steps that they should take. We also got them an excellent 4.75% rate on their home loan.

Last week, we assisted 6 homeowners in contesting their property tax appraisal. We don’t know the results of that yet although it seems that if you show up and contest the valuation; the Central Appraisal District will lower your valuation and, at least, not raise it. This week we were working with one client on their assessment. Some of the assessments come out very late.

So if we did not help you this week, it’s your own fault. You just didn’t ask. If you have any real estate related questions, please feel free to e-mail us or call. We are here to serve you.

I received an e-mail the other day from a Flower Mound homeowner when the following story, “Methane plume found in Flower Mound,” appeared in the Dallas Morning News. His question was, “What does this do to home $ale$ in our area ??? I automatically replied that it should “fire them up!”

I think that the better question would be, “What will it do to property values?” The short answer is, “I have no idea.” But let’s explore that idea a bit.

A specially equipped van was “sniffing” the air around natural gas facilities in Flower mound in early March and discovered “methane gas plumes” near the intersection of Scenic Drive and FM1171 measuring 40 parts per million (40 ppm). The Dallas Morning News ended the article with the ominous statement that, “State health officials are investigating a child leukemia cluster in Flower Mound.” You understand the implication.

Methane gas is the primary component of natural gas. When we think of natural gas, we automatically think of how it smells. But natural gas (and methane) has no smell. The smell you are thinking of is introduced into the gas ( it’s called Mercaptan) before it is shipped for our consumption.

I e-mailed the Texas Commission on Environmental Quality (TCEQ) on Tuesday and asked them at what level did methane become dangerous. They said that they would get back to me on that. My cursory research did not indicate that Texas has established a maximum dangerous level but I’ll let you know what the e-mail said.

So I thought I’d approach this from another direction. At what levels are smoke and gas detectors set to go off? My research showed this. Methane has what is called a lower explosive limit (LEL) and an upper explosive limit (UEL). Between these two limits, light a match, and poof, St. Peter’s got your life on the big screen. The LEL is 50,000 ppm. Most smoke and gas detectors go off at about 20% of the LEL or 12,500 ppm. Many people can smell natural gas (with the added Mercaptan) at 10,000 ppm.

The van equipment would only register up to 40 ppm so we don’t actually know how high the ppm was or is for Flower Mound. As for the relationship of methane gas to leukemia, my cursory Internet research did not show a direct correlation. I’m not saying that there isn’t, but I did not find any web sites that would state that directly. I’d welcome any comments if someone knows more about this relationship.

So back to my original question. My opinion would be that, at this point in time, 40 ppm is not going to cause a run on Flower Mound homes and therefore not affect the value. If in time, this turns out to be a more dangerous situation, then there is a possibility that values would be affected. (How’s that for a fence-riding answer?) The effect on values may be similar to homes that are next to high voltage power lines—some buyers will take it into consideration and others don’t care. We will have to watch this situation and see how it smolders.

Property taxes in Texas are due on October 1 and late after January 31^st of the following year. Why should we be talking about them now you ask? Because very soon, sometime in March or April, possibly May, you will receive a notice from the Central Appraisal District (CAD) of the county in which your property resides.

This notice gives the property value that the CAD will use in assessing your property taxes. You have a right to protest that value if you think it’s too high. I suppose you could protest if it’s too low but why would you? The assessed value of your property has no effect on the value of your property for marketing purposes should you decide to sell your home.

You have until May 31 to protest the CAD’s value. Here’s where we at SunWest, REALTORS® can help. We develop a comprehensive market analysis (CMA) of the value of your property. Once we have done that, we can tell you whether or not you should challenge the CAD’s assessed value. If we (you and I) decide that we you should contest the value, we will provide you with the information you need to make a successful (hopefully) challenge of your property’s value. Most CADs have an informal process that makes a protest relatively painless.

The thought is always to keep your property values as low as possible hence keeping your taxes low. You may think that well the CAD only raised my value a small amount so I’m not going to bother with it. The problem is, in this market especially, the possibility exists that your property value went down not up.

Give us an opportunity to run a CMA on your property and keep the CAD (don’t you love all the acronyms?) honest. This is a service we provide free of charge on an annual basis. There’s no obligation, we just want you to think kindly of us when you have any real estate questions. Please give us an opportunity to save you some money!

In 1973, we were satisfied with 1,500 square feet to live in plus a garage. That satisfaction was short-lived and homes ballooned to 2,495 square feet in 2006. Since that time we have seen house sizes shrink as the cycle reverses itself. New home buyers in 2010 are looking for well-designed smaller homes with certain necessary amenities.

Buyers are seeking eco-friendly homes that bring in the outside (read many windows) so as to maintain an allusion of space without the accompanying increase in costs associated with greater square footages. Along those same lines, open floor plans will also be in demand.

Another necessity in new homes is office space. The formal dining room is disappearing in favor of an at-home office and, in some cases, two offices. More and more people are working out of their homes so offices and high speed communications are an absolute necessity.

Two story homes will remain popular because of the decreased cost per square foot of living space even though many buyers will not want to navigate the stairs on a daily basis. ( A good recommendation here is if you do purchase a two story home, make sure the master bedroom is on the main floor.)

If you are in the market for a new home, please feel free to consult with us, so that your purchase becomes a valuable, saleable asset that will meet future demands in housing.

Foreclosures and short sales still seem to dominate the market. David Brown, the head of the Dallas office of Metrostudy, Inc. commented in a Dallas Morning News article that “One out of four pre-owned homes sold so far this year [2009] was a lender selling a foreclosed home. The market cannot recover until those get flushed through the system.” That is what we are finding in this market also. Unfortunately, this is frustrating lenders as they try to preserve value while trying to get these homes out of their inventory.  It also frustrates the buyers who are racing to beat the April 30 deadline for the government’s $8,000 tax credit for first time home buyers and $6,500 credit for current home owners. In addition there seems to be a number of homes that have not been posted for foreclosure as lenders try to work through government mandated loan modifications. This process, in my opinion, is probably delaying the inevitable and more foreclosures will continue to impede the recovery of the housing market in the near future. Although builders are putting up some homes in anticipation of last minute buyers seeking the tax credit, new home inventories continue to fall as that market weakens and lenders tighten the builder’s funding. To top that off, lender requirements seem to get more restrictive on a daily basis. The cost of purchasing a home using FHA financing will increase on April 1. In the meantime, there is good news. We have some great properties for sale and interest rates are still at all-time lows.  So if you are staying put, it’s once more a great time to refinance, and if you are buying, rates can’t get much lower.