Rick Schwartz

A little background before we start on the subject of ugly houses.

Real Estate Markets are very, very local - so this article is based on recent experiences with clients who are buying homes in Danbury, buying homes in Bethel, buying homes in Brookfield and buying homes in New Milford.

Our MLS system in Greater Fairfield County, CT, showed 11 homes the other day with price increases. There were many more than that where the prices are being reduced so I can't conclude that we are now in an appreciating market but.... although they are a bit confusing there some signs out there that we may be climbing out of the bottom.

The challenge for sellers over the last few years has been coming to grips with the fact that their home isn't worth what they would like it to be. Soon, the real challenge may be for buyers.

WAITING FOR THE PERFECT STORM - PERFECT PRICE, RATE AND HOUSE

The challenge for buyers recently, has been that they don't want to buy until we are "AT THE BOTTOM". Many people, who need to move for a variety of reasons, don't want to buy a house until they are sure that it will not continue to fall in value.

People are staying in their existing homes or apartments much longer they would probably like to because they only want to buy when their new house is going to appreciate.

IT ALL DEPENDS ON YOUR PRIORITIES

It's all about individual preference, I suppose. Shereen and I bought our condo in June of 2007.

It is now September, 2009 and the value of our home is down roughly 14%. While we'd certainly like it if the value had gone up, we can't even begin to express how much happier we are living where we do, than living where we were. It's a much nicer, newer, bigger place and we are loving it. Had we held out for the bottom, we'd still be living where we were - all stressed out, waiting to move until the market changed.

In the end, if we'd put off our move until today, more than 2 years later, we'd probably have sold for 15% less than we did, so we'd have spent 2 more years wanting to move and we wouldn't have made out any better financially.

HOW WILL WE KNOW WHEN WE HIT BOTTOM

My loyal Blogosphere fans have heard me talk about "the bottom" before, specifically that we are not going to know where it is until we can see it in our rear-view mirrors.

Having said that there are many who are saying that homes in the Danbury, Brookfield, Bethel area, might just be at the bottom. The challenge with hitting the bottom, is that the turning of the market is not going to be clear cut. It will be a series of little dips, climbs, more dips and then a steady, if slow climb.

SO - IF THE MARKET IS HEADED UP, WHAT IS THE FASTEST WAY TO GAIN EQUITY WHEN YOU BUY?

Finally - back to the topic at hand.

Lately, I've had a number of buyer clients who have asked me about the "Ugliest Home Principle". In Real Estate Lingo we call this the Principle of Progression. The counter to it is the Principle of Regression. Here's what they mean in simple terms.

The Principle of Progression says if you have the most modestly valued home in a neighborhood of higher priced homes, your value will move closer to the value of the higher priced homes. In a down market, your home will drop more slowly and in an up market your home will rise more quickly.

The Principle of Regression says that if you have the highest valued home in a neighborhood of lower priced homes, your value will move closer to the more modestly priced homes. In a down market your home will drop more quickly and in an up market your home will rise more slowly.

Before we talk about the actual financial wisdom of this, you first need to answer to yourself the following two questions.

1. When you find this ugly, small, low value home, willl it suit your life needs in terms of size, bathrooms, bedrooms, location etc.?
2. Will you be happy living in the ugliest, smallest, lowest value home in the neighborhood?

If you can honestly answer "YES", then let's look at the principles themselves and consider if they hold true.

DO THESE PRINCIPLES ACTUALLY WORK?

The answer is that they both Progression and Regression do work - but there are a couple of caveats.

First - they work best with a new home. If there is a neighborhood of 3000SF, 4BR 2.5 Bath Colonials on 1.5 acres and you build a 1500SF Hi-Ranch with 3BR 1.5 baths on .35 acreage, your house will likely appreciate faster than if you built the same one in a neighborhood of other modest hi-ranches.

If the neighborhood has been around for 20 years and are looking to buy that 1500SF Hi-Ranch that was built 15 years ago, you have to keep in mind most of the Progression has already happened. Remember, the value of the modest home gets "closer" to the value of the higher-priced homes but it they'll never be equal. It doesn't keep going up forever.

Secondly, let's assume that the "ugly" home is only 5 years old and the value has gone up - here's the catch. The person selling the home also knows about this principle and guess what - HE wants to take the increased equity. This is not a secret plan that only you know about. So you're not going to "trick" the seller into selling below market value and then magically gain the value from Progression.

WHY ARE YOU BUYING A NEW HOME IN THE FIRST PLACE?

As a Realtor this is the question I always ask my buyer clients to consider carefully before deciding what home to buy?

Most often, people are moving to accommodate some change in lifestyle.

• Moving up for a growing family
• Downsizing after empty nest syndrome kicks in
• New job - new commute
• Moving into a town that suits you better

or a hundred other reasons. The thing is you have to keep those reasons in mind. If you are choosing a house for lifestyle reasons but overlay that reason with wanting to buy a house that is going to gain equity the fastest, you will have to compromise somewhere. You can't serve two masters and get what you want.

Pick the investment avenue or pick the lifestyle avenue and move in the direction that you think is most important to you. After narrowing down the choices, you can compare the short list in terms of the "other master" and see how close you can come.

Be true and honest with yourself about why you want to move and let your Realtor help you find the home that suits your personal needs.

Danbury News Times indicates that the actual opening of the Bypass will be during the week of 11/16.

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My Original Post from July 09

The wait appears to be over for residents of Danbury, Bethel, Brookfield and New Milford, CT. The long-awaited extension of "Super 7" as it is known, is nearing completion and, barring any unforeseen circumstances will be opening in November, 2009.

Better Commute

The bypass which will be a 4 lane limited access highway that extends the current Route 7 Highway from it's current northern terminus at Route 202 in Brookfield - just south of the Brookfield 4 Corners - to the border with New Milford. Since a large area of "local" Route 7 in New Milford was expanded to 4 lanes over the last couple of years, this connection from the new bypass will give drivers a straight shot from the NY/CT border on I84 right to the heart of New Milford.

Easier to shop in Brookfield

In addition, the bypass is expected to ease traffic considerably on the existing local portion of Route 7 which runs through the 4 Corners, through Brookfield. This should make shopping in Brookfield even more pleasurable than it already is, since you'll be able to turn in and out of local merchants parking lots with much more ease.

Official Confirmation

I had been hearing about the impending completion "on the street" so to verify it I contacted CT State Representative David Scribner from the 107th District. Representative Scribner is the ranking Republican on the CT. General Assembly's Transportation Committee.

In an email he sent me earlier this week Mr. Scribner confirmed the scheduled completion of the bypass for this November.

He commented, "After many years and too many delays, the Route 7 Brookfield Bypass is on schedule for completion in November 2009."

Regarding the cost of the project, Representative Scribner went on to say, "Funding for this project has been split 80% Federal and 20% state, with total expenditures as of 7/1/2009 reaching $82.5 million."

He also added, "The Route 7 bypass is a critical addition to the area's transportation infrastructure that will go a long way in alleviating traffic congestion in one of Brookfield's major business districts. While the project met some hiccups along the way- I am extremely pleased that the Bypass is on track to become reality in just a few short months.

Those of you who know me well have to be rolling your eyes at the idea of me talking about places to buy and consume fresh produce and farm products. After all, my idea of trying to eat healthy is to have a diet Coke with my burger and fries.

As the old expression goes - "It's not what you know but who you know." So I asked my friend Alicia Ghio @Aliciaghio on Twitter, for some help in putting this article together. Alicia, is a great resource in the area for all things about eating healthy - and local. She hosts a terrific Web Show called The Natural Princess where she entertains and educates you about things that grow. It's not only good information, Alicia has a very cool style and makes learning fun.

I've been watching the episodes and I've learned so far that there are 7,000 different varieties of Apples, and that Apples can help pregnant women in a few different ways - and the stuff you can use garlic for is really amazing....So check out her shows as well her Blog LOCAL FOOD ROCKS.

Anyway - she put together the list below for us to help find out where in the area we can go to partake of some locally grown, healthy stuff.

FARMERS MARKETS

BETHEL FARMERS’ MARKET Saturdays 9 a.m. - 1 p.m. July - October Fairfield County Cooperative Extension Building Rte. 6, 67 Stony Hill Rd FMNP Authorized

DANBURY FARMERS’ MARKET Fridays 11 a.m. - 4 p.m. J

uly 10 - October 23 Kennedy Park, Main Street FMNP Authorized EBT Available

GEORGETOWN FARMERS’ MARKET Sundays 10 a.m. - 2 p.m. May 24 - November 1 Intersection of Main Street & Rte. 57

NEW MILFORD FARMERS’ MARKET Saturdays 9 a.m. - 12 p.m. May 9 - October 31 Town Green, Main Street FMNP Authorized

RIDGEFIELD FARMERS’ MARKET Fridays 3 p.m. - 7 p.m. June - October 88-90 Danbury Road www.ridgefieldfarmersmarket.org

SANDY HOOK FARMERS’ MARKET Sundays 9 a.m. - 1 p.m. June 1 - October 1 5 Glen Road

SANDY HOOK ORGANIC FARMERS’ MARKET Tuesdays 2 p.m. - 6 p.m. June 23 - Oct. 13 St. John's Church, 5 Washington Avenue EBT Available

FARMS/FARM STANDS

BABBLING BROOK FARM 16 Church Road, Sherman, CT 06784 860-354-2749

Seasons Open: July to October Hours: 24hrs/7days Honor System: Yes

Products offered: Vegetables, Pumpkins, gourds, and other fall products

BLOOMINGFIELDS FARM 9 Route 55, Sherman, CT 06784 860-354-6951 Products offered: perennials

Farm stand: Fri., Sat, & Sun. 10am-5pm Memorial Day to Labor Day

BLUE JAY ORCHARDS 125 Plumtrees Rd, Bethel, CT 06801 203-748-0119

Seasons Open: July to October, November and December Hours: Mid-Aug to Xmas. Market: 10am-5:30pm, PYO: 10am-5pm.

Products offered: Pumpkins, gourds, and other fall products, Fruit, Agritourism activities: pick-your-own, corn mazes, hayrides, etc., Specialty foods including jams, jellies, honey, maple syrup, salsas etc., Specialty products such as CT made soaps, candles, lotions etc.

FORT HILL FARM Bay State Organic Certifiers 18 Fort Hill Rd., New Milford, CT 06776 860 350-3158

Products offered: flowers, fruit, garlic, herbs, salad greens, transplants, vegetables Weston and Westport Farmers’ Markets

GARDEN OF IDEAS 647 North Salem Road, Ridgefield, CT 06877 203-431-9914

Seasons Open: April to June, July to October, November and December

Hours: Daily, 10am-4pm

Honor System: Yes

Products offered: Vegetables, Green products such as annuals, perennials, nursery/landscape stock, potted herbs, cut flowers, etc., Agritourism activities: pick-your-own, corn mazes, hayrides, etc.

HOLBROOK FARM 45 Turkey Plain Rd (Rt. 53), Bethel, CT 06801-2842 203-792-0561

Products offered: bedding plants, cheese, eggs, flowers, fruit, garlic, greenhouse, herbs, honey, milk, on-site bakery, perennials, pork, poultry, salad greens, straw, transplants, vegetables

Farm stand: year round Mon-Sat 10:00am-6:00pm.

ON THE ROCKS FARM 9 Points O’Rocks Road, Newtown, CT 06470 203-426-3868 wpieragostini@yahoo.com Products offered: Eggs, Farm Stand, Poultry, Turkeys Farm Stand: Self-serve, 9am – 5pm, 7 days a week.

SHORTTS FARM & GARDEN CENTER Bay State Organic Certifiers 52-A River Side Rd., Sandy Hook, CT 06482 203-426-9283

Products offered: bedding plants, eggs, flowers, fruit, herbs, perennials, salad greens, transplants, vegetables New Canaan & Sandy Hook Organic farmers’ markets

Farm store at farm: Apr -Oct. 7 days a week

STONE’S THROW FARM, LLC PO Box 76, Bethel, CT 06801-0076 203-798-0151

Products offered: Berries, container plants, fruit, flowers, garlic, herbs, pumpkins, salad greens, vegetables.

SULLIVAN FARM 140 Park Lane, New Milford, CT 06776 860-210-2030

Seasons Open: April to June, July to October, November and December

Hours: Mon-Sat 9:30am-6:30pm, Sun 12pm-6pm

Honor System: No

Products offered: Vegetables, Pumpkins, gourds, and other fall products, Agritourism activities: pick-your-own, corn mazes, hayrides, etc., Specialty foods including jams, jellies, honey, maple syrup, salsas etc.

TAYLOR FAMILY FARM 94 Great Plain Rd., Danbury, CT 06811 203-744-1798

Products offered: bedding plants, flowers, garlic, gourds, greenhouse, hay, herbs, honey, perennials, salad greens, transplants, vegetables Bethel & Georgetown farmer’s markets

VICTORIA TAFT'S GARDEN 94 Rte. 39 North, Sherman, CT 06784 860-350-2711

Seasons Open: April to June, July to October Hours: Open daily starting in May, 9am-6pm

Honor System: Yes

Products offered: Green products such as annuals, perennials, nursery/landscape stock, potted herbs, cut flowers, etc.

WARRUPS FARM Stellar Certification Services 51 John Read Rd., West Redding, CT 06896 203-938-9403

Products offered: Christmas trees, flowers, fruit, garlic, gourds, hay, herbs, maple candy, maple syrup, pumpkins, vegetables.

Weston and Maple Demo’s Farmers’ Market Farm stand: mid August-end of Oct, Tues-Sunday, 10:00am-6:00pm

Retail store and pick your own sales Maple syrup making demonstrations 1st three weekends in March—pick your own pumpkins & hayrides weekends in October and Columbus Day, 11-5. Group visits Tues-Fri by reservation.

WHITE SILO FARM & WINERY 32 Route 37 East, Sherman, CT 06784 860-355-0271

Seasons Open: April to June, July to October, November and December Hours: Call for hours

Honor System: Yes

Products offered: Fruit, Vegetables, Fruit Wines

I wrote recently about how the "mortgage approval pendulum" has been swinging as far from the 2003-2005 position as it possibly can. This has slowed down the process considerably.

Well - it's swinging even further and it could very well slow down the process even more.

It is called the Mortgage Disclosure Information Act and it will be effective on July 30, 2009. I'll give you some details below but for those of you who want the bottom line first - here's the deal.

There is a new time line going into effect, designed to give borrowers increased opportunity to read the Truth In Lending Disclosure (TIL) statement that your lender will send you.

The TIL statement is a document that lenders send to borrowers after the loan application is completed. It is not a mortgage commitment - it merely give you all the details of the loan that you applied for. provides you with information such as:

• APR (Annual Percentage Rate): Not to be confused with INTEREST RATE - read the difference here
• Finance Charge
• Amount Financed
• Total Payments

and some other information which you should read and ask about if you do not understand it.

The TIL statement is not new. What's new is the time line which provides a specific number of days from application to the sending of the statement and from your receipt of the statement until the earliest possible closing date

GOOD THING OR BAD THING?

I can guarantee that there will be a lot of debating on this issue. There's no question that it will in some cases impede the process. The idea of getting a quick closing is pretty much dead. On the other side, the argument is to make sure that borrowers have enough time to read, ask questions and understand exactly what they are agreeing to do when borrowing money.

For me - I'm not going to venture my opinion here. If you're a regular reader of mine, you'll know that I try not to waste time on things that are basically irrelevant. Like it or not, as of right now, these changes are going into effect in about a week. So, the most important thing is to know the rules and plan accordingly.

THE DETAILS

First of all this applies to loans for all owner-occupied dwellings. It applies to purchases and re-finances.

It will not apply to:

• Home Equity Lines of Credit
• Construction-only Loans
• Bridge Loans
• Reverse Mortgages
• Investment Properties

So for everything else here's what to expect

* The lender must mail the TIL no later than 3 business days after the loan application is completed.

* The closing may not occur until at least 7 Days after the lender mails the TIL or 3 Days after the borrower receives it. Whichever is the LATER date will be the soonest you can close.

IS THAT IT?

Not exactly. Sometimes, between a TIL being issued and the closing date, some of the closing costs may change. This can happen for a few different reasons - attorney costs, pre-paid interest amounts and a few other things.

So here's the wrinkle

Since closing costs impact the APR, it follows that if closing costs increase above the estimate, the APR will go up. Makes sense, right?

* If the APR increases by more than .125% on a fixed loan or .25% on a variable, the lender needs to issue a new TIL statement to the lender.

* If a new TIL needs to be issued, the closing cannot occur until 6 days after it is issued or 3 days after the borrower signs it.

TOO MUCH DETAIL FOR YOU?

Not trying to make your eyes blur. It isn't necessary for you to memorize the dates and details. The net effect is that that these new rules, make planning ahead more important than ever.

• Select a lender before you find a house
• Get a Pre-Approval done as early as possible
• Sit with the Lender and make sure he goes over all the critical dates with you so that you can set your expectations properly.
  

When you are shopping for a home loan you will usually see rates quoted in two columns. The first will say INTEREST RATE and the second will say APR - which stands for Annual Percentage Rate.

What's up with that? Shouldn't the interest rate BE the Annual Percentage Rate? In a perfect world it would seem so - but, alas it is not.

The challenge is that this is one of those questions where if not explained simply, the answer can seem more confusing than the question. At the end of the day, I really believe that it's one of those great mysteries of life that "they" will never share with us - the regular people.

I do not claim to understand all the math but what I can do is explain to you the theory behind why there are two figures and how you can look at both numbers in a way that can help you make a decision about where to get your mortgage.

INTEREST RATE

This is the percentage that is used to calculate your monthly mortgage payments. So if you have a $250,000 mortgage and a rate of 5%, - the annual interest will be 5% of $250,000 or $12,500.

The $12,500 is then divided by 12 to determine the amount of interest you'll be paying monthly - about $1040.

The monthly interest payment will be added to the monthly principal payment to complete the calculation of your mortgage payment. There will likely be taxes and insurance added to that but that is not money that ultimately goes to your lender so it is not relevant for this discussion.

ANNUAL PERCENTAGE RATE

This is the "Cost " of your mortgage calculated as an annual figure. It includes not only the interest, but also points and some of your closing costs. So it will be likely always be higher than the interest rate This number is the true cost of your loan.

SO - WHY DO I CARE AND HOW DO I USE THIS INFORMATION?

What you need to look for when comparing loans is the "spread" between the two figures.

LOAN #1: 5% Interest Rate with an APR of 5.25%

LOAN #2 5% Interest Rate with an APR of 5.65%

In Loan 1 the spread is .25% In Loan 2 the spread is .65% Loan two is a more expensive loan.

DOES THIS MEAN I CHOOSE LENDER 1?

There are many different factors you may use when choosing a lender. This is just one of them. It's one of my general life rules that the least expensive product does not make it the best. Understanding what something is costing you, though is critical.