Home Improvement Blog

The Fed cut the interest rates for loans to banks by half a percent. This seems to have stemmed the drop in the stock market for the time being. It was a pretty big drop too, over a thousand points in the course of days, almost 10% of its overall value, finally something significant.

For homeowners this can be significant because this rate cut can trickle down to mortgage and other types of loans.

The biggest bugaboo the Fed worries about is inflation, it has a long institutional memory and they  live in fear of another round of stagflation like the one during Jimmy Carters administration. In all likelihood interest rates will rise over time.

Now is a good time with interest rates pretty low to fix up the house for the next 5-10 years. Now would be a good time to make your home a lot more energy efficient and easy to life in. The next few years could be a little rough on the pocketbook as energy prices fore a lot of other prices to rise as well. I just bought some milk and it is over $4/gallon now. Gack.

Powerzoning is neat new way of keeping your whole house at a proper temperature.

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The Bathroom is about the third most used room in the home after the bedroom and family room. Most people spend a lot of time in there. Looking for some ways to do some quick and easy updates to your bathroom. Here are a few ideas:

• Bright colors: Having trouble waking up in the morning? Use bright and bold colors to stimulate your mind and have more energy when getting up. Not sure you want to paint the walls yellow, that’s fine just replacing the shower curtain can do wonders.
• Replace the faucets. I hate nothing more then those snub faucets that don’t let you get your hands wet without hitting the sink with my knuckles. I am also rather tall and I tend to have to bend over to use a lot of sinks, this is not so god on my aging back. A nice goose-neck allows even tall people to use them comfortably.
• Replace the sink. It used to be you can have any color you want as long as it was white for bathroom sinks. Now there are a great multitude of sink designs and colors. It used to be undermounting was cool now it is overmounting with fancy glass bowls.

• Update the lights. While generally you want some bright light in the bathroom for putting on makeup it is nice to have a very low wattage bulb for midnight waters. You can completely change the way the rom works by applying some good lighting.

So, last week the Fed pushed $62 Billion into the financial markets to reduce inflation pressure on the banking system because of the sub-prime market meltdown.

What else is happening, because of the meltdown?

• Mortgage rates are fluctuating like crazy. In New York rates jumped from 8% to 13% in three days.

• If you have poor credit and even if you are owning the home, you may not be able to refi because of tightening credit rules. This is really tough on the loads of people with ARM mortgages as they will be having to sell as they can’t make the payments any more.

• Stocks based on mortgage paper are also beginning to suffer and that will be rippling through the stock market as well. If you have a 401(k) or mutual fund, it probably has some mortgages /mortgage-based stock in it.
• Of course, since the stock market is taking hits here, the other stock markets around the world are getting pummeled, too.

While the Dow hit 14,000 it has been retreating heading toward 13,000. I think a lot of people lusted after that nice big round number and sold like crazy cashing in for a profit.
It also looks like a bunch of people have freaked out about it and are selling because “everyone” is selling.

If you haven’t seen Jim Cramer’s meltdown, it’s worth seeing. Jim is a perma-bull, he always says the stock market goes up. In general he may be right but there are obviously corrections from time to time that definitely go down. We are seeing that right now, it looks as though the Dow is heading for 13,000 as people reevaluate the market.

I’ve read up on this a little and the big thing that Jim is complaining about is the Federal Reserve’s (the Fed) policy of printing lots of money but not so much that it causes too much inflation. The Fed has been scared of high inflation since the Jimmy Carter era.

There are two big markets that the The Fed are trying to balance: the stock market and the housing market, actually they are linked. Mortgages have been packaged into debt instruments and sold on the stock market. While Jim Cramer’s buddies may be big into the stock market most voters are in the mortgage market. At a guess I would think Congress would tell the Fed to concentrate on the mortgage market since we are coming up on an election year. So the mortgage market may remain pretty stable until 2009 then things may get really interesting.

There is a complication however. The Chinese have been buying a lot of US T-bills, which is financing a lot of this stuff, and when Congress started debating over possible protectionist policies toward Chinese goods, because of those poisoned toothpastes, toys with lead paint and the rest China said “Who buys all your debt, again?” This could be a little bit interesting as China has enough T-bills to drive up our inflation rate at least for a short while.

I don’t know that would help them really as we buy almost everything they make. While the Chinese are getting more prosperous they can’t exactly sell all that stuff to their own people, they just don’t have a large enough techno-literate class to buy iPods, internet frigs and all the rest.

Is it an empty threat? Not exactly. It depends on if they can count the cost or think the cost is worth it. They do have a burgeoning middle class that is calling for more freedom, a trade war would be very bad for them but the ruling class may just want that.

On the whole we can expect a rather bearish next few years.

A tornado in Brooklyn, you don’t see that very often. Actually there have only been 4 tornadoes in New York City in the past 100 years. Tornados and other wind events can happen anywhere.

It is rather funny, in New York if the wind exceeds 75 mph it’s a hurricane, in Southern Colorado, it’s just the wind.
After a disaster you need to do a few things. First off, stay at home so emergency crews can get around more easily.

Watch out for wildlife that has been driven out of their dens. They are under stress too and are more likely to bite or attack.

Use flashlights rather then candles in case the gas system has been compromised. Use bottled water in case the water system has been compromised.  Listen to the radio for updates on both of those systems.

If your home has been damaged, take pictures to record the damage before attempting any repairs. You just want to shore things up at least until your insurance adjuster gets there to verify the claim. Then you can get to work.

Finally watch out for scammers. They tend to flock to disaster areas looking for a quick buck.

A home office is a place of refuge for doing important work. Setting one up in your home should be taking with proper preparation. Converting a spare bedroom or basement are is typical in most homes.
First off, how much desk space do you need? IBM did a study with their developers and found that they needed about 30 square feet of desk space. This is about the size of a couple of desks. Which makes a certain amount of sense one deck for a computer and another for writing and organizing. If you are looking to maximize your space adding shelving above the desk is a good idea.

Second, how will you organize it? This is obvious but most people forget this step in the hustle and bustle of putting it all together. Put your most used items at the places they are most used, put the things used often next to the places they are used and things rarely used can be across the room.
For example put the printer near the computer, the paper next to the printer and the ink cartridges can be in the cabinet above the printer.

Third, get a good chair. If you have the potential of banging away at the computer for a few hours a good chair will really help out. It will save your back, hips and shoulders from extra pain.

Finally, set up a household management station. This is the place for paying bills that has all the things you need: stamps, envelopes, pens, checkbook and so on.
Just remember to take them to the mailbox.

Wooden patio furniture is very beautiful and the warmth of wood makes for easy sitting.
It really enhances your outdoor living space to have good furniture out there.

Wood is a product that needs a certain amount of care, like everything. There are a couple of things that you can do to help protect the wood and make it last a long time.

Protecting the wood in the first place is a major thing. This takes more then a simple surface stain. A good sealer will go deep into the wood and reinforce it from the inside.  Stain just changes the color which you may want to do but is not as important as the sealing process. A sealer then is not put on correctly will also fade and flake after a short time. It needs to go deep.

Another thing to do is to protect the furniture from excessive sun. The Sun is a powerful bleaching agent. Keeping the furniture shaded during the worst part of the day, generally from 1-3 in the afternoon, will make a major difference in how long they will last. A simple umbrella will do or a cover will do it too. Also covering them during the winter is good too.

Good wooden outdoor furniture can last a lifetime, but it needs proper care.

The NYT has a really nice calculator for deciding on whether it is better for you to rent or buy.
The most important thing to realize it that you have to do some research on your own to be able to put in the right numbers. If not, you may get something like this. Be careful about your assumptions.
For rent make sure you look at what the big guys are doing. Ignore the mom&pop landlords as they don’t drive the market. It is the big property owners that do. If you are actually looking to rent you are better off looking for the mom&poppers since they usually have better deals in the long term but don’t count on it. Rents also tend to increase about 2-3% a year (about the inflation rate). Unless you live in a “Most Livable City” tend they will skyrocket. I’ve lived in two of those cities and it was terrible, almost a death sentence for those cities. In one of those cities rents tripled in the space of just a couple of years, but wages didn’t go up nearly as much. That was hard to live through.

The great thing about a mortgage is that the payments stay fixed (with a fixed mortgage, obviously) for 30 years. Find a landlord that would do the same for you.

You need to run the numbers for your town but don’t expect rents to not go up at, at least, inflation rates. And if renting does make sense you better have the financial discipline to invest the saving, few people have the ability to do that.

It looks like American Home Mortgage Investment Corp can’t pay its creditors or take on new debtors. The mortgage industry is taking some very big hits. And things like this don’t help the economy in general. This may be one of the larger causes of the big drop in the Dow a couple of days ago.
The Implode-o-meter continues its climb.

Businesses fail all the time, but watching an entire industry fail is something scary to watch. This is not some little niche industry like buggy whips, but something that almost all of us have or will have dealings with.