Month: February 2009

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Tankless water heaters: Hot water or Hot air?

Tankless hotwater heaters are all the rage right now. Claims of decreased energy usage by ½ are common. These are also called instant hot water heaters, which leads to confusion. While a good product for certain uses, shelling out the dough for tankless hotwater heater will not necessarily green up the planet.

In Western Oregon, there may be no or very little energy savings when tankless are compared to conventional hotwaters, if both are located inside the living space. For either style of hot water heater, the energy used to heat water is shed into the environment. So, the energy used to heat the water in turn heats your house. If you use air conditioning, there will be an added cooling load for the couple of months it’s needed.

While the hot water is made instantly by a tankless model, that does not mean you’ll have hotwater immediately at the tap. In fact, if you locate the tankless model in the same place as your old hotwater tank, it will take exactly the same time for the water to turn hot at the tap, or other point of use.

I went to Jerry’s, the world’s greatest home improvement center, and talked with them. They stock all kinds of hotwater heaters, and they’ll help you size your water heater, which will depend on the number of major draws. Tankless hotwater heaters cost around $1,000 for an average house, compared to about $350 for a tank model. For both hotwater heaters, both electric and gas models are available. The electric models of tankless hotwater heaters require some serious dedicated circuitry: 60 amps for a very small, one draw unit, and 120 amps for a full house model. Older houses may have only 100 amps available at the panel, and newer standards are for panels of 200 amps. For comparison, an electric clothes dryer needs 30 amps, a traditional hotwater heater needs 30 amps, and a stove needs 50 amps.

Instant hotwater at the tap requires a different set up, namely a recirculating system. The price for these are about $300-$400 in materials. This set up actually increases energy consumption, because it keeps water at the tap hot at all times. One other option for instant hotwater is to have a small point-of-use tank located near the tap.

The chief advantages of tankless hotwater heaters, as I see it, are: that they can be located outdoors, thereby conserving living space, and they don’t run out of hotwater, which is useful if you need to fill a large bathtub.

The Inside of a typical Tankless Hotwater Heater

The Inside of a typical Tankless Hotwater Heater

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Fannie Mae Loosens Standards for Multiple Property Owners

Investors will once again be able to get Fannie and Freddie loans for up to 10 properties. Recently, the limit had been ratcheted down to loans on only 4 properties, which was an impediment to rental owners.

The new program, effective March 1, 2009, is available for borrowers that own between 5 and 10 financed properties. This time around, the GSE’s (Fannie and Freddie) actually want some signs that the borrowers will repay. These minimums include:
∙ 25% down payment.
∙ Credit score of 720.
∙ No bankruptcy within 7 years.
∙ No mortgage delinquencies within the last year.
∙ Documentation of enough money to make 6 months payments on all the mortgages (Principal, Interest, Taxes, & Insurance) they have. These funds must be resting in their checking, savings, and/or retirement accounts.

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How Long the Recession Will Last

So, how long is it? Hard to tell in the dark.

Economics is a rather dark art and will only tell us when the recession is over after it’s over. But only a long time after. My prediction: end of 2009. The reason: the government stimulus should take about 9 months to show up in the economy. And, with some 1 trillion dollars plus being pumped into the economy, that will do something. That’s the equivalent of the government lending each citizen in the U.S. over $3,000.

It is thought that the U.S. consumers account for some 10% of the world’s economic growth, and nearly 3/4 of the U.S. G.D.P. Currently, consumers have zipped their wallets and purses. As soon as the news stops scaring the hell out of us and confidence returns, spending will tick up, and things should improve.

How does this affect housing prices? It should remain a good time to buy through the end of 2009.

Low Consumer Spending Will Change

Low Consumer Spending Will Change

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Jumbos: Let Them Eat Cake?

Jumbo loans, those greater than 417K in most areas of the U.S., including Lane County, are becoming delinquent with increasing frequency, according to a recent WSJ article. The rate of jumbos greater than 3 months delinquent has shot up to 6.9%, nearly a 3-fold increase from last year.

Jumbo loans are more expensive than conventional conforming loans, usually by at least 1.5%. The reason: Without the government backing of Fredie Mae or Fannie Mac, investors perceive more risk and demand a higher yield.

So, what does this mean? The market for higher-end houses requiring jumbo loans should be soft. Larger down payments, higher interest rates, and great credit scores reduce the amount that buyers will pay. But, if you have the money, now’s a good time to buy.

Pittock Mansion in Portland. Used with permission.

Pittock Mansion in Portland. Used with permission.

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American Recovery and Reinvestment Act

I met with Mike Gansen, of Gansen Construction, and the President of the Oregon Home Builders Association on Friday. He shared the details of the American Recovery and Reinvestment Act that the National Association of Homebuilders have been lobbying for. It had just cleared the Senate and is expected to be signed by Mr. Obama next week.

Certain key provisions especially important to homeowners and home buyers are:

1) 8,000 first time home buyer tax credit requiring no repayment for home purchase between 1 Jan and 1 Dec. 2009. The home must be your principal residence, and if you sell within 3 years, the credit is recaptured.

2) Enhancement of Section 25C program for energy efficiency remodeling to existing homes.

3) Increases in FHA, Fannie Mae and Freddie Mac loan limits to 2008 levels.

There are plenty more goodies in the Act, but the above are especially important.

Mike Gansen, President of the Oregon Home Builders Association

Mike Gansen, President of the Oregon Home Builders Association

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Gardens to Gazebos: Schimer + Associates

I recently had the chance to talk with Michael Sanchez of Schirmer + Associates, a landscape architecture firm in Eugene. Many of us don t have a clear idea of what landscape architects do in Lane County, and Michael cleared up some of the confusion.

Site design and the creation of places are major skills landscape architects bring to residential, commercial and public projects, and probably what most of us think of as their primary roll. Proficiency in areas such as: grading, drainage and storm water management, planting and irrigation design, design of site features like pergolas or gazebos, and paving designs fit into this category of site design.

Land Use Planning is another significant area in which some landscape architects are involved. Land partitions, sub divisions, planned unit developments, conditional use permits and annexations come under this area. But, Mr. Sanchez was quick to point out that landscape architects are concerned with anything that has to do with any area outside of a building. Are we clear now?

So, from the simplest to the most complex of garden design to the planning of your next subdivision, keep Schirmer + Associates in mind. You can reach Michael at 686-4540.

Landscape Architect

Michael Sanchez: Landscape Architect

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Green Show a Success

The annual Good Earth Home and Garden show recently concluded in Eugene on 25 January 2009. As a “green” show, it had a good home in the Emerald Empire. I’ve gone to a lot of shows at the fairgrounds, and can’t recall one with better attendance.

Admittance was free, which is a plus in these hard times. There were some 69 seminars held and 250 exhibits. There was a common element of sustainability or naturalness to most exhibits and seminars. Seemingly, Eugene is a hotbed for sustainable practices.

I stopped by to see a friend of mine who was exhibiting. She was so busy, I put my bag down and helped her work her booth. It was a blast. Make it a point to attend the next show and you’ll have a good time.

Eugene's Green Home Show was a busy place.

Eugene’s Green Home Show was a busy place.

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Great House Plans in Eugene

If you’re looking for a dynamite set of house plans, keep Rick McAlexander of Associated Designs in mind. Most of us in Eugene Springfield don’t know what a big deal he’s become. His design column is published in some 1,000 newspapers around the United States. And, he’s one of the nicest guys you’ll meet.

The old time builders around will recognize the name. Rick’s out on his own and has been doing exceptional design for the last 20 years. He has 5 people working for him to keep those plans rolling out. They have over 750 plans available. And, if you can’t find what you like, they’ll be happy to design a custom set, just the way you like it.

Rick tells a funny story about toilets. He says that if you want a toilet in your living room, he’ll do his best to educate you about the pitfalls of such a plan, but if it comes down to it, and that’s what you really, really want, that’s what you’ll get.

Associated Designs also offers a revision service to modify plans to fit your lot or to your other specifications. They’ll also do an inexpensive site plan and quickly too, I’d point out. They can also tell you what to expect when you apply for a building permit.

So, what’s it all cost? A study-set of plans runs about $425. and a set of building plans starts at $650. What a deal!

There are plenty of good lots in Eugene Springfield and now’s a great time to build. New construction financing is available too.

Ric McAlexander of Associated Design.

Rick McAlexander of Associated Design.

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Fannie Virus

Disgruntled alien attempts to wipe out the U.S. home mortgage system–sounds like a line from Men in Black, to me. But, it’s true. The WSJ reported that a 35 year old Indian-National here on a work visa planted a virus in Fanie Mae’s computers. The virus was set to go off yesterday and destroy all of Fannie’s data, lodged on some 4,000 servers.

The alleged culprit, Rajendrasinh Makwana got fired by Fannie, and apparently thought it was better to get even than get ahead. Mr. Makwana was indicted by a Federal Grand Jury, but has plead innocent. What happened to being grateful to America as the land of opportunity?

The virus was caught in time, and it’s business as usual. Good thing–otherwise it might have been tough to get a loan.

Fannie Mae Headquarters in DC. Photo by NCinDC.

Fannie Mae Headquarters in DC. Photo by NCinDC.