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Open House
Tips on Cutting Back Energy Costs: Atlantic Station: An Energy Independent Atlanta Community; Cash-Out Mortgage Refinances on the Rise
Aired May 13, 2006 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
GERRI WILLIS, CNN ANCHOR: Gas prices are high, home energy costs are up. But we have ways to save money on energy, strategies you may never have heard of before. Plus why so many homeowners are cashing in on their mortgages and if you should too. We'll show you how to grow a garden to be proud of and take you on a tour of a home that is, well, quite connected. Good morning, everyone, I'm Gerri Willis and this is OPEN HOUSE.
Okay you probably think you've heard every tip in the book when it comes to saving on energy costs, but we have some new information you may never have heard of before. Let's get right to. Christine Woodside wrote a book called "The Homeowner's Guide to Energy Independence." Okay Christine, I want energy independence, how do I get it?
CHRISTINE WOODSIDE, AUTHOR: Well, if you had unlimited funds and an incredible amount of discipline, you could have it in a week, but that's not the reality for most people.
WILLIS: So let's start with some small steps then. What are the first things I can do if I just want to start saving money today?
WOODSIDE: The first thing you can do is run on down to your local supermarket or big store and buy compact fluorescent light bulbs and replace five of the most commonly-used lamp fixtures in your house with these bulbs.
WILLIS: Aren't those expensive, though?
WOODSIDE: They used to be. When I started writing the book, they were $11 to $15 a piece, now you can get them for $1.89.
WILLIS: Wow, that's a very big difference and they last a long, long time.
WOODSIDE: They last a really long time and you'll save $50 over the life of the bulb. And you'll notice the difference in the electric bill.
WILLIS: Awesome. Okay. Let's talk about the energy hogs of your house, the appliances. You talk about a lot of these but let's focus in on the refrigerator for just a minute because they really use a lot of energy and a lot of people have two. WOODSIDE: Yes, the refrigerator is the big bad guy in your house and if you have two you should unplug the second one immediately. And some states will even pay you to give it to them and get rid of it, that's how much they want you to.
WILLIS: Wow.
WOODSIDE: We analyzed our refrigerator in our house and I thought it was close to 10 percent of our electricity and I was shocked. But our refrigerator is 10 years old. More than 10 years old.
WILLIS: So if you buy a newer one do you get better savings?
WOODSIDE: If you buy a newer one you're going to get much better savings and if you buy one that's labeled energy star by the government, it will be like a 10th of what the one we have is. And that's on our short list.
WILLIS: In my house you don't even need a night light at night, there's so many things plugged in and little lights blinking. What kinds of things are you talking about unplugging?
WOODSIDE: Well the big thing that I recommend unplugging is the personal computer in a house. You might not be able to do that at your office where it's integrated in a big system so don't do that and blow up your office. But at home you can turn it fully off and then you can turn off, you can even unplug it at night because it will continue to draw power if you don't.
WILLIS: Okay. I have to get to the solar energy, this is the big Kahuna. A lot of people think about doing, but really expensive, can cost as much as $35,000. Is it worth it for most people?
WOODSIDE: For most people it would be worth it as a supplement to what they're doing. I would recommend anyone who has the interest to look into solar as a supplement. It's not realistic now to say I'm going to run my household the way it's run now on solar. It wouldn't provide enough.
WILLIS: Is it possible to get off the grid? Just very quickly, we don't have much time.
WOODSIDE: It is possible to get off the grid, but most of us are already tied to the grid so it's better to keep tied to the grid and sell anything that you generate back to them. Which is --?
WILLIS: Back to the energy companies.
WOODSIDE: Right.
WILLIS: All right, well Chris, thanks so much for being with us today.
WOODSIDE: Thank you. WILLIS: So now that you know how to make your home energy independent, how about an entire community? Reynolds Wolf, takes us on a tour of a brand new community in Atlanta and they have a new way of life where everything you need is within reach and spending money at the pump is a thing of the past.
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REYNOLDS WOLF, CNN CORRESPONDENT: For years, the defunct Atlantic Steel Mill was a toxic eyesore near downtown Atlanta. It's been transformed into Atlantic Station, one of the hottest places in the city to live, work and play.
JIM JACOBY, CHAIRMAN, JACOBY DEVELOPMENT INC.: We tore down the steel mill and we rebuilt it in sort of the steel mill look. And that's what this whole project is about, it's recycling, redeveloping.
WOLF: Developers say they hauled out 165,000 tons of contaminated material. Jim Jacoby helped pioneer smart growth, combining green spaces, energy and water efficiency.
JACOBY: This is about a seven-acre park. This is a retention facility for all the storm water runoff and we filter the water and reuse the water.
WOLF: The retail residential makes is attracting the young and the hip, empty nesters and many others. 2,500 residential units have already been sold and they've been weaved into a million and a half square feet of retail and entertainment venues. These days three bucks for a gallon of gas is another draw for residents like Jean Hee Park.
JEAN HEE PARK, ATLANTIC STATION RESIDENT: When I'm on the monorail, the train or if I'm on the bus or if I'm on -- even on the Atlantic Station shuttle, I see all these people in their cars sitting in traffic and not having to deal with all of that traffic is definitely reassuring. I'm also saving money as well by being transit dependent. I don't own a car.
WOLF: This is a beautiful view that you have here.
MICHELLE MOULTON, ATLANTIC STATION RESIDENT: You can see all of Atlanta. You have the dome.
UNIDENTIFIED FEMALE: Georgia Tech.
WOLF: Michelle Moulton and Crystal Coffman live on the 26th floor of 12, a combined condo and hotel complex.
MOULTON: Definitely it's nice to be able to go downstairs, go out to dinner, have drinks and be able to walk home.
CRYSTAL COFFMAN, ATLANTIC STATION RESIDENT: It's very nice not to be able to drive, to be able to live here and work here, with the gas prices the way they are, it's really great.
WOLF: Did your car miss you? Do you miss your car?
COFFMAN: Yes.
MOULTON: She got a flat tire from not driving.
WOLF: An in-house computer system lets condo dwellers share the amenities of hotel guests.
JAMES BORDERS, PRESIDENT, NOVARE GROUP: If you're 25 to 34 years old and single, and you can point and click for room service, you can point and click for maid service. I mean, this is nirvana. This is like being back home with mom.
WOLF: The U.S. Green Building Council has recognized Atlantic Station for its sustainability, perhaps a model for other cities.
Reynolds Wolf, CNN, Atlanta.
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WILLIS: Coming up on OPEN HOUSE, why you may or may not want to use your house as a piggy bank. Plus, gardening tips that will leave your neighbors green with envy. Weekend practice is on the way. And talk about envy, you'll get an inside look at one house who's on the cutting edge of technology, but first, your tip of the day.
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UNIDENTIFIED REPORTER: Make sure no one is using your credit. Check your credit report every year. Log on to annualcreditreport.com or call 1-800-322-8228. It's free, secure and you can request your information from all three major reporting agencies. If you notice something wrong, dispute it with those agencies immediately. And that's your tip of the day.
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WILLIS: People continue to squeeze money out of their homes. In fact, the number of cash-out refinances surged to the highest level in more than 15 years in the first quarter. Real estate expert Brad Inman is here to help us sort through the pros and the cons, the costs, and whether or not it's the right move for you. Brad, good to see you.
BRAD INMAN, REAL ESTATE EXPERT: Good to see you, Gerri.
WILLIS: All right. So these people refinancing, they're not getting a lower rate of interest. They're just using their house as a piggy bank. Is that smart?
INMAN: You know it really does concern me, Gerri, because our savings rate is way down. Some of our pensions are not very reliable anymore and the one thing we could always count on was the equity in our house. And the part I don't like is people are refinancing up to the value of their home and then on top of that they're buying what I call depreciating assets, cars and boats and things that are going to lose value instantly and going into debt for a long time.
WILLIS: Let's talk a little bit about the risks of doing that. When is the risk of taking all the equity, everything you've paid into that house out?
INMAN: Well you know it works fine when there's a lot of appreciation Gerri, as long as our home prices are going up, then you spend a little, but who cares. Right now in the market it looks like it's evening out. It's gone from a seller's to a buyer's market, prices are flat. So you spend all that equity and if you were counting on that for retirement and you don't get that appreciation, then you're really blowing the dollars on things that aren't worth much. On the other hand people that are --
WILLIS: Let's stop here for just a second. You say spend the dollars on things that aren't worth much. Are there things that would make sense to pull equity out of your house and spend on, for example, maybe a business, maybe improving your house. How do you use that money?
INMAN: Absolutely. Yeah, investing in your house for sure because that's going to increase the value. Your children's education. What could be a better investment than that? A lot of people do refinance their homes or take an equity line to start a business. Again, you're investing in something that has asset value. What's happened, though is our mortgages any more become bank accounts, they become credit cards themselves and I think people misunderstand that they're going into debt to use that piggy bank. It's not as if that's free money sitting in their bank account. It's amortized over many, many years so it's really quite expensive.
WILLIS: So don't buy the flat panel screen TV or the vacation or even pay off the credit cards, you say. Those are all bad ideas, right?
INMAN: Well, the credit cards it really depends if you go into more greater mortgage debt to pay off your credit cards and you'd pay down your mortgage, then it's probably logical if you do in the short term. But if you sit with that debt for a long period of time, you're amortizing it over many, many years. The difference between that credit card debt and that lower mortgage debt may come back to bite you later on.
WILLIS: Brad, has refinancing just gotten too easy?
INMAN: Well you know, the mortgage lenders out there, the housing market is slowing so they don't have as much purchase money as they call it and those are mortgages on buying a home. So they're really scrambling to get the refinance market going. And where it's most active is when rates go down. And now that rates are going up, they're really out there pushing and marketing these credit lines.
WILLIS: Right. It makes sense to pay attention to that. It makes sense to pay attention to those marketing claims. I have to get you to one other topic though Brad. Really interested in what you have to say about all of these mortgages where the rates are going reset this year, next year. People could be getting into trouble here. Isn't that right?
INMAN: Yeah. This is really the year of reckoning and next year where these adjustables where people took very, very low teaser rates, even negative amortization, interest rate-only loans that have adjustments that are -- they're really happening every six months and people are feeling the bite. You know 20, 30 percent increases in their monthly mortgage payments.
And I think when these loans are taken out, people knew about it, but they didn't expect it to occur because we had declining rates for so many years. So that is a big concern. The other thing with these credit lines and these refinances is these offers of no-cost loans. There's no such thing as a no-cost loan. Every loan has an interest. So it's not a no-cost loan.
WILLIS: Right. You got to pay attention to the marketing hype here obviously Brad. I'm telling you, those mortgage bankers, their industry is consolidating, you'll have to watch what you buy out there. Brad, thanks so much for being with us today. We really appreciate it.
INMAN: Thank you, Gerri.
WILLIS: Still ahead, a look at the most technologically advanced home in the country.
Plus it's not easy being green. How do get your garden into tip top shape. That's coming up next on OPEN HOUSE.
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WILLIS: We're well into spring, moving quickly toward summer, and it's time to take another look at your garden and what you need to do to fill in the blanks.
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WILLIS: Spring has sprung and if you're wondering about the next step for your garden, listen up. Suzy Bales is here. She's the author of "Down to Earth Gardener" and she's going to give us some answers.
So Suzy, you love to say that now is a great time to really think about your garden. Divide up some plants that you can save money over the long haul if you actually plan right now.
SUZY BALES, "BETTER HOMES & GARDENS": Well, I think of flowers the way most people think of money and there's never enough. So I have to find all kinds of ways to do it. So let's look at some of these easy perennials that you can divide every year.
WILLIS: Now what do we have here? BALES: What we have here are some primroses. Now, primroses will bloom between six and eight weeks, depending on how cool the weather is.
WILLIS: They're beautiful. Now what are we looking for here, Suzy?
BALES: You're looking for the rosettes. Do you see this clump? There's a rosette right in there.
WILLIS: So we're going to divide them.
BALES: Each rosette is an individual plant. You can pull it apart, that's all you do. In here, look, see I've got two. Actually three.
WILLIS: You can pull those apart and then plant each of these how far apart?
BALES: Well I would plant them about six or eight inches apart and every year they will have a new cluster of between three and five rosettes. So --
WILLIS: That's beautiful.
BALES: See here they go.
WILLIS: And we're not paying for these? We're just expanding on what we already have.
BALES: Exactly.
WILLIS: Now you say you can do this with (INAUDIBLE) too, but I have to tell you, this is a massive plant to divide.
BALES: And this is early spring, this will get huge leaves.
WILLIS: It's gorgeous.
BALES: You see, it's the same principle. Do you see the rosettes in there?
WILLIS: Yes.
BALES: Okay.
WILLIS: So these would be separate rosettes, right?
BALES: Each one of these can be a separate plant. This is not brain surgery. You can't hurt anything.
WILLIS: You're not going to break it?
BALES: No. As long as it has roots attached. See how tough that is?
WILLIS: Wow.
BALES: This we can plant separately. There you go.
WILLIS: Now you just dug this right out of the ground, right?
BALES: I did.
WILLIS: And you don't worry about bringing up too many roots? How deep do you need to go with the (INAUDIBLE)?
BALES: I always use a fork. Because then I'm not killing too many roots. If you use a shovel you slice them off.
WILLIS: Now here's my worry. I have daffodils, I have tulips, they're over. The flowers are gone, they're spent. What can I do with them now?
BALES: Well you know people don't realize, now is the time to divide them. They always think of fall as the time to plant your daffodils, but now you can divide them. Look at the clump over here that we have. And you'll see all of the little babies. See here are some babies that have fallen out. Yeah. There you're pulling some more up.
WILLIS: Beautiful. They're gorgeous. Now is there any bulb I can't do this with? Tulips?
BALES: Tulips do not reliably return. They might come back for three years, but do it with bulbs that naturalize like wood hyacinths, (INAUDIBLE).
WILLIS: And that's the word you use, naturalize, you get them moving across your lawn, you can fill out a woodland area and really make it fill full without spending a lot of money.
BALES: Right. Right. And also, now's the time to look around your garden and see where a bulb would make a difference. In the fall when you plant them you can't remember what's blooming in the spring. So if you see a flowering shrub then put some bulbs, divide your daffodils from the other side of the driveway and put them under your shrub for next year.
WILLIS: And you say that you can cover up some of the bulbs where their vines are dying with plants that are going to grow now. Correct?
BALES: Yes, that's it. The foliage of your ground cover or your perennial will cover the dying foliage.
WILLIS: So that's just like heaven, that's perfect. Great.
(END VIDEOTAPE)
WILLIS: If there's a weekend project you'd like to see, just send us an e-mail. The address is openhouse@cnn.com and you can check out past weekend projects on our website, cnn.com/openhouse. Still ahead, it's not too late to show mom how much she means to you. Last- minute ideas for mother's day. That's up next. And we'll take you inside a home that gives a new meaning to the word connected when OPEN HOUSE comes right back.
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WILLIS: Most of us enjoy modern technology in our homes in the form of DVD players or maybe a home theater system, but one home is so wired it was recently named the electronic home of the year by the magazine "Electronic House" and we got you a private tour.
(BEGIN VIDEOTAPE)
WILLIS: So this is your bedroom?
MARK SCHLESINGER, "CONNECTED HOMEOWNER": Yes.
WILLIS: And where's the TV?
SCHLESINGER: This panel controls everything in the apartment.
WILLIS: Holy guacamole. Okay. So, Mark, what's your favorite feature here.
SCHLESINGER: Well I think the coolest thing in this room is lighting. This is LED lighting which can control color, solid colors, fast rainbows, you name it.
WILLIS: So, Mark this is where you control the sound, right?
SCHLESINGER: Yes, this is the media room for the whole house.
WILLIS: Awesome, so how do you do it?
SCHLESINGER: Well let me show you, have a seat.
WILLIS: The sound -- where are we hearing it coming in from?
SCHLESINGER: Well this room has speakers everywhere, it has speakers in the ceiling there, it has speakers on the other side, speakers behind you.
WILLIS: There's one there.
SCHLESINGER: Yeah, one there. There's even a subwoofer right behind you.
WILLIS: He's even connected in the bathroom, look at this.
SCHLESINGER: Okay now in here, you can actually put on television.
WILLIS: So you can sit on the john and watch TV?
SCHLESINGER: Absolutely.
WILLIS: My husband would love this.
SCHLESINGER: Out here, I have everything from -- actually a wireless computer network. I can select music --
WILLIS: And lights, the lights will come up and down?
SCHLESINGER: Absolutely. And I can control the ponds.
WILLIS: We're on a rooftop in New York City. Where do you have a pond?
SCHLESINGER: Press a button, watch.
(END VIDEOTAPE)
WILLIS: If only we could all be that connected. Don't forget that tomorrow is mother's day, but if you haven't gotten your mom anything yet, here's your guide to staying out of the doghouse with some gifts mom is sure to love. Now if your mom's the family handyman, get her a tool kit for women. We're talking hammers, wrenches and screwdrivers designed with a woman's grip in mind and color coded, of course. Check out the website, Barbarak.com for more info.
And we all know about Swiss army knives, but maybe mom would feel better packing a miss army knife. The miss army knife in pink of course, has needle and thread, perfume storage, a flashlight and a mirror. Check out beautydeals.net. And if you've already hit the road, there's no need to sweat, what else says I love you more than a pre-paid gas card especially these days. You can pick up pre-paid cards at any convenience store along your route. We want to hear from you, send us your comments, your questions to openhouse@cnn.com. And you'll find more on today's guests and topics on our website, cnn.com/openhouse.
As always, we thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week and we're going to tell you all about those hidden costs you may not think about when looking for a second home. Plus, important information about preparing your home for your summer travel. We hope you'll join us, don't go anywhere, your top stories are next on "CNN Saturday". Have a great weekend.
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