Maureen Kennedy

On Jean Street, right behind Ace Garden on Grand Avenue, is a hidden gem. And the roses are still blooming, though take this opportunity to note ''see Rose Garden'' next year the week after Mother's Day, when it's at its prime.

I enjoyed the garden by myself last Sunday, morning cup of tea in hand, though it's a great place to get work done while younger kids romp around or look for tadpoles in the shallow lilypad pond. Very stroller-friendly. I even caught up with a family friend there one evening years ago, with gin and tonics at hand in a Thermos!

So What's Going on in this Market??

Only 11 homes sold in Piedmont this past quarter, compared to 18 homes during the first quarter of 2007 (and 21 during 1Q06). The average price per square foot settled in at $606/sf, lower than last quarter's $631/sf, but consistent with the pattern of the last several quarters. The typical home sold in 28 days for $1.609 million. Prices ranged from $815, 000 to $2.85 million, with only one home selling for more than $2 million.

Perhaps more interesting than what has sold is what has not sold. On the market are six homes in the over $2 million price range. Three of these have seen price reductions of between $400-500,000 in the past several months. And only three have sold in that price range in the past five months.

Two active listings are of particular interest, because they illustrate a bit of the story behind the Case-Schiller Index. As do we, economists for years relied on median or average prices to track market movements. Case and Shiller instead rely on same-home sales over time for ''apples to apples'' comparisons. See http://www.macromarkets.com/csi_housing/MSA/san_francisco.asp to play with the data for the San Francisco metro area. Two homes, one originally sold in 2002 and one in 2005, are now on the market for prices lower than those for which they were bought.

A recent Chronicle story sure woke us up: ''Home values are eroding at an accelerating rate in the Bay Area as the credit crunch and a game of chicken between buyers and sellers pushed last month's prices down nearly 15 percent and held the number of homes sold near a historic low.''

What's happening?

As I've mentioned in past updates, average and median prices in northern California were still going up because sales activity in the below $500,000 market had stalled. Many of those buyers faced tougher downpayment and credit score requirements than last summer, and a number of the sellers were ''underwater''--that is, they owed more on the property than it was worth, and they would have to take money from savings to pay off their mortgage at sale, or get the lender to agree to a ''short sale'' and eat the difference. Lenders were taking a month or two to sign off on short sales--or not. With sellers feeling unable to reduce prices to market levels, and buyers unable to offer the same higher prices they could six months ago, the market was paralyzed. What IS a market price in this environment?

Now, many of these short-sale properties have moved through the foreclosure process and are REO or real estate owned [by the bank]. The REO managers have taken over from the loan servicers and are selling at fire sale prices left and right. For instance, of the 10 sales below $500,000 in zip code 94605 in the last month, seven were REO, probate or short sales, selling at as little as 75 percent or even 65 percent of formerly reasonable asking prices. Seventy-four percent of currently pending sales under $500,000 in Berkeley and Oakland are short sales or REO. What is a market price in THIS environment? It's not what a home sold for even last week; it's what the REO guys are willing to take for the other homes on the market.

(Think about that for a minute. Three-quarters of households selling lower-cost homes in our area are facing great financial pain, whether they invited it or not. And think about their neighbors, whether long-time homeowners with plenty of equity, or recent purchasers who are making mortgage payments on homes that aren't worth what they currently owe. These neighborhood-wide effects and disinvestment are what city leaders are particularly worried about.

Contact me if you want to explore investment property--we're now seeing prices so low that rentals are again ''cash-flowing''--that is, the rent and tax benefits cover expected costs. A thoughtful market watcher outside the biz said to me last week, ''those guys [investors] are the heroes in this market.'')

In contrast, the upper-end market is relatively stable. If we look at single family homes of at least three bedrooms and two baths selling in 94610, 94611, and 94618 (Piedmont and Oakland), there have been 67 sales since 1/1, an average of 47 days on the market, and an average sales price of $1.044 milion ($437/sf). Same time last year, we saw 65 sales, in an average of 28 days on market, at an average $1.1 million ($449/sf). A modest number of these are short sales or REO--don't think our market isn't immune. About seven percent of currently pending Oakland and Berkeley homes above $500,000 are ''distressed,'' according to the listing agent, who is required by MLS rules to note if the home is a short sale or in foreclosure.

And the mortgage market chaos is being felt here. I've heard of buyers planning to write a hefty home equity line check for a downpayment on a new home before selling the old. And a day before closing, the bank says, ''that was last week. We've just reduced your line of credit by 50% this week.'' Or 80/10/10 loans locked in a month ago, but the second mortgage documents just never show up at closing, leaving the buyer to come up with $50,000 (in one case) in two days. Or lenders asking for a second appraisal a couple days before closing--or docking the existing appraisal by x%, because the broad East Bay market is considered a ''declining market'' by the GSEs.

In either case, the buyers need to find the cash to cover any shortfall, or face losing the house AND their 3% initial deposit. During last August's initial flush of chaos, I thought one of my sellers might have to step in with seller financing to cover a gap like this, but the situation resolved itself. I think we're likely to see more of these creative solutions in the coming months in our market--once lenders get stabilized enough to be clear about their constraints up front, which is not necessarily in their capacity right now.

Tough times for the buyer and the seller. Definitely a time to put your business in the hands of a thoughtful, smart agent thinking about all the angles and potential pitfalls, and communicating them clearly and with compassion.

Part of my 360-degree service is linking you with resources you need.

If you haven't met with your attorney in the past two years to review your current situation, it's time. If you've been procrastinating since you bought your high-value home, or since your lower-value home appreciated to become a high-value home, it's time. If you haven't clarified whom you'd like to step in and take on the kids--or if they haven't agreed, it's time.

Please come to my home at 104 Pala Avenue on Thursday, March 6th from 7:30-9 pm for healthy dessert and decaf coffee,* and a short presentation followed by Q&A with Dewey Watson of Tierney, Watson and Healy in San Francisco (Dewey is our former school board president; I've worked with him for years on the Boy Scout board, over which he also presided). Look at his most recent newsletter here; RSVP to me at Kennedy@MaureenKennedy.Net as we have limited space.

Come on; pull the trigger!

And remember, I'm never to busy for your referrals!

As promised, here is my Top-10 list to help green your home. To me, that means reducing our environmental footprint by: increasing the efficiency of the resources we do consume,[*] reducing/reusing/recycling; and eliminating environmental hazards.

Let me start out by saying that tuning up your home saves money (what's not to like?), increases comfort and improves peace of mind. I can't tell you how much more comfortable our tight, renovated, radiant-heated 1916 home in Inverness is. And removing asbestos from our heating ducts here next month will give me peace of mind-at least for children brought up in this home in the future!

Your future buyers and their agents can feel and understand the difference in a tuned-up home (particularly if it's pointed out as part of a thoughtful marketing campaign organized by an EcoBroker, of which I am one of few in the Bay Area).

So, I subjected our 1908 3500 sf, 5 bedroom/3 bath home to both:

•· John McComas's state-supported Energy Checkup process (contact him at john@jmcinspections.com or 525-7173-it's $200, or $75 as part of a home inspection. I'm now purchasing one for all my buyer clients to complement their home inspections), and

•· PG&E's very detailed online Smart Energy Analyzer (click here).

My concern-so many lists of tips, like the Dept of Energy's site (http://www1.eere.energy.gov/consumer/tips/) or even the State of California's site (http://www.fypower.org/res/tools/energy_tips.html) assume air conditioning, or oil heat, or sub zero temperatures. How can I best leverage dollar, water, and CO2 savings here?

My unscientific ah-hah moments:

Turn off the computers! The PG&E calculator asked me how many computers there were in the house, and whether they were turned off (i.e. pull the plug out) at night. Answers: 5-8, depending; and generally, no. Our "other" electric consumption, including the computers, microwave, two rarely used older TVs, and coffeemaker, dwarfed remaining electrical usage, primarily from food storage and lighting.

PG&E estimates we could reduce our usage and bill by $571-951 (love that specificity!) and our CO2 production by 2,400 lbs annually by religiously turning off the computers. This is nearly an order of magnitude greater than most other suggestions from the audit. More consistently turning off our mix of recessed and other lights, in contrast, would save $21-26/year. BTW, laptops are better than desktops. OK, kids, forget all that nagging about turning off the lights-turn off that computer!

Weatherstripping is so boring, but it tops John's Energy Checkup process, and makes a big difference, even in this warmer environment (cuts heating costs 10-30 percent in CA; pays back the cost of materials in less than a year; avoids 1,200 lbs of CO2 annually). We'd save about $500 a year by weatherstripping and carefully plugging leaks and gaps in the house (for instance, where plumbing lines pass from the unheated basement to the heated first floor kitchen and bath). If you know in your heart that you'll never get around to it, suck it up and call Shel Harris, Berkeley's energy conservation guru, who'll do it right-he's at shlnrgy@lmi.net or 549-3290. His running commentary on energy efficiency comes free.

Insulate the attic: Forty-five percent of a home's heat loss tends to be from inadequate insulation. Upgrading to today's R-30 standard is not that expensive, and you'll save money and CO2, and feel more comfortable. This tops Shel Harris's top-four list, but does involve a relatively longer payback period.

Install a flash water heater when your tank goes: Talk about increasing comfort and doing the right thing! Despite five people now taking showers every morning between 6:30 and 7, we don't run out of hot water. When you consider that your flash system may last three times as long as a traditional tank system, the total cost is about the same, while operating and CO2 savings (2,000 lbs/yr) are gravy. Shel Harris saw his gas bill decline by two-thirds after he installed his system during the summer (without the heat on to mask savings--national numbers put the savings at closer to 30 percent, but they reflect a different fuel cost than we see here).

While the hot water installer is there, ask him/her to add a no-maintenance, 30-year-warranty automatic shutoff valve to your gas line-Contra Costa is already requiring them before a sale closes so we're likely next, and it's cheaper to install if the professional is already there. Peace of mind has value too! Barron McEwing of BMC Mechanical (BMCMech2002@yahoo.com) is installing one for me soon for $350 (it would be less if he's addressing your heat or hot water issue).

Change to low-flow shower heads: Installing low-flow shower heads in our showers would save money (savings cover installation costs in only six months), precious water (7800 gallons/year-shocking!), and CO2 (400 lbs). More than air-drying dishes, adjusting the washer load size or reducing water temperature every load, etc. We all love those older water-rich shower heads in our unrenovated showers, and fear the trickle-of-water showerheads of yesteryear, but I have to say that I love our Rohl water-efficient showerheads out in Inverness. Make the change sooner rather than later!

When replacing any appliance, look for the Energy Star label. Now wasn't that easy?

When considering any remodel of our older homes, paint over ("encapsulate") potential lead paint--don't sand it; spring for double-paned windows (see a recent This Old House article for how-tos); buy a 93/95/97% efficient furnace (saves about $100 and 1,000 lbs of CO2 annually); upgrade or repair your furnace ducts to eliminate leaks; think about adding wall insulation if you're adding shearwall; get rid of that asbestos the inspector mentioned to you when you bought your home (abatement is much cheaper than you'd think, and young buyer-families can get freaked out about it these days); consider a flash water heater system; and even think about solar panels on the roof (it's about the only thing the City of Piedmont can't nix--due to state law!). Many of these upgrades won't break even anytime soon, but they'll make your home more attractive to the next buyer, and will reduce costs and increase comfort

Small stuff to put in practice: Wash or dry only full loads of dishes and clothes, sweep-don't wash down decks and patios, turn off lights, don't leave the door open so the dog can go in and out freely (got that Buck?), close the fireplace damper when not in use, open window coverings on the south side of the house during the day and close at night (and reverse in the summer).

Small things you can do in the next hour: Reprogram your programmable thermostat to optimal temperatures-55 at night and 68 during the day (installing one saves over 400 lb of CO2/yr); check to make sure your fridge and freezer temperature settings are at the middle of the dial (39 and 3 degrees respectively); lower your hot water heater temperature to 120-130 degrees; close or duct-tape heater vents going into unused rooms; and then go to the hardware store:

•· buy a mess of CFLs so that as your old lightbulbs go out, you're ready to Do the Right Thing (replacing 12 lamp bulbs that are typically on for 2 hrs/day saves a lifetime total of $600, and 150 lbs of CO2 annually), and

•· buy a couple of power strips-plug your equipment into the strip, and then just turn the strip on and off when you need to use the TV or computer. This approach eliminates that "phantom load"-when your TV and computer suck in energy even though you turned off the appliance itself.

Five important appointments to make in the following hour: 1. Call your heating specialist for a furnace tune-up; 2. call your insulation specialist to check your attic's R-value and install any needed insulation up to R-30 standards (it's SO cheap); call Jaco Environmental (1-800-741-0172, appliancerecycling.com) to come and pick up that old incredibly inefficient (but running) garage refrigerator (use an ice chest for special occasions instead). A family in Medford, MA reduced their electricity bill by 30 percent by getting rid of their old basement freezer. PG&E will pay Jaco clients $35 for it.

That handy list of rebates for Alameda County residents from the 1Q08 newsletter can be found http://www.builditgreen.org/webfm_send/133, and my list of vendors can be found now or later at www.drop.io/MaureenKennedyUsefulStuff. The password is MaureenKennedy (case-sensitive). Email me if you'd like to see a sample copy of the Energy CheckUp.

[*] A smaller home is better than a bigger home; one home is better than two.