New Lead Based Paint Rule

Effective April 22, 2010, a new rule regarding lead based paint goes into effect.  This new regulation, issued by the EPA, deals with lead-safe work practices and contractors who work in buildings with lead based paint.

The new Renovation, Repair and Painting Rule pertains to anyone who receives compensation for working in residences built prior to 1978 and deals with any other the painted surfaces in the residence.

Per the EPA website:

The requirements under the rule apply to maintenance, renovation or repair activities where six square feet (about the size of a poster) or more of a painted surface is disturbed inside, or where 20 square feet or more of painted surface (about the size of a door) is disturbed on the exterior. Window replacement is also covered by the rule. Under the new rule, child-occupied facilities are defined as public or commercial buildings where children under age six are present on a regular basis. Those affected by the rule will be required to:

• Apply to EPA to be approved as a Certified Renovation Firm.
• Receive the necessary training and certification from an EPA-accredited training provider for Lead Safe Work Practices.
• Assign a Certified Renovator to be present at each project
• Ensure that lead safe work practices are used throughout the project.
• Provide consumers or tenants with the EPA pamphlet “Renovate Right” prior to the start of any project that will disturb six or more square feet of interior painted surface or 20 or more square feet of exterior painted surfaces in housing and child occupied facilities built before 1978.
• Maintain records documenting that the required information has been provided at each project subject to the rule.

Housing: Undervalued and Stuck There

Wells Fargo & Co. economists wrote in a note to clients last week, “The calculus of home buying and finance has changed,” summing up succinctly something that is troubling housing experts all over the country.

Housing researcher Global Insight recently released a study of U.S. housing prices that points to the magnitude of the collapse of values.

Nationwide, Global found housing values were about 10 percent undervalued, based on a model that examines interest rates, household incomes, population, and historical price patterns. That’s a modest number compared to metro areas hardest hit by the housing recession.

In Fort Lauderdale, Fla., Global calculated that housing prices were 24 percent undervalued as of the third quarter of 2009. Three years ago, it said the area was 44 percent overvalued. Global calculates that Las Vegas is now undervalued by 41 percent compared to being 33 percent overvalued in 2006.

The trillion-dollar question is: When will things turn around? As long as there is high unemployment and tight credit, many experts believe it won’t be anytime soon.

Will Home Prices Go Down in 2010?

Some real estate researchers are forecasting that home prices will fall again in 2010.

· Fiserv Lending Solutions, a financial analytics firm, predicts that prices will decline an average of 11.3 percent in 342 of the 381 markets it covers.

· Moody’s Economy.com foresees another 8 percent drop, with Arizona, California, Florida, and Nevada feeling even more pain.

· Shari Olefson, author of Foreclosure Nation: Mortgaging the American Dream, predicts a national average decline in prices of about 10 percent in 2010.

· Peter Schiff, president of Euro Pacific Capital and the most bearish of the bears, says real estate prices could possibly fall another 30 percent before they hit bottom.

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun sees it all differently. He predicts home prices will rise more than 3 percent in 2010.

“The headwind we face is rising mortgage interest rates,” Yun says, “but the compensating factors will be the home buyers tax credit in the first half of the year and increased job creation in the second half.”

Declining Dollar Brings Foreign Investors

Falling prices for real estate and the declining value of the dollar are luring investors from all over the world to purchase properties for as little as half what they might have paid four years ago.

“This could be a once-in-a-generation opportunity for real estate investment,” says Arthur Wong, whose Calgary, Alberta-based U.S. Real Estate Fund has invested $5 million in properties in the U.S. Southwest and plans to buy millions more.

Buyers from countries like Brazil, Canada, France, and the Netherlands, whose currencies are particularly strong against the dollar, are spending millions on luxury condos in New York City, Las Vegas, and Miami. Foreign buyers also find the warm climates of California, Texas, and Arizona attractive.

Peter Zalewski, a principal with Miami-based Condo Vultures, says he has sold foreign condo buyers seven bulk deals in downtown Miami alone, with investors coming from Argentina, Canada, Colombia, Italy, Norway, and Venezuela.

One-Fourth of Borrowers Are Underwater

More than 23 percent of people with mortgages owe more on their properties than they are worth, according to a report released Tuesday by research firm First American CoreLogic.

Another 2.3 million homeowners are within 5 percent of being underwater, bringing the total of those who are upside down or close to it to about 28 percent.

About 5.3 million U.S. households have mortgages that are at least 20 percent higher than their home’s value, the First American report says. Borrowers owing more than 120 percent of their home’s value are the most likely to default, First American calculates.

The majority of underwater mortgages are in the following states:

1. Nevada: 65 percent of home owners are underwater
2. Arizona: 48 percent
3. Florida: 45 percent
4. Michigan: 37 percent
5. California: 35 percent

The report also notes that most U.S. homeowners have home equity, and nearly 24 million owner-occupied homes don’t have any mortgage at all, according to the U.S. Census Bureau.

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