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Open House

Measuring the Market; Online Child Protection; Managing Money Online

Aired July 28, 2007 - 09:31   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

GERRI WILLIS, HOST: Hello. I'm Gerri Willis, and this is OPEN HOUSE, the show that saves you money.
The big news for home owners this week, the real estate recovery is delayed yet again. I'll tell you what you need to know.

Plus, how to keep your family and finances safe online.

And, could there be a hidden treasure in your attic? What you need to know before cleaning house.

But back to our big story of the week, your house and the state of the market. A lot of numbers were out this week, leading many to wonder if there is light at the end of the tunnel.

Existing home sales fell 3.8 percent in June. New home sales also took a plunge last month. They're down 6.6 percent.

So what does it all mean? Well, here to explain is Brian Westbury, the chief economist with First Trust Advisors.

Brian, thanks for joining us.

BRIAN WESTBURY, FIRST TRUST ADVISORS: Gerri, it's great to be with you.

WILLIS: OK. Some of these numbers kind of conflict. For example, home prices were actually a little bit better. Other numbers looked bad. What do you make of it?

WESTBURY: Yes. Well, I think the thing to remember is that even at current sales levels, which are way below the peaks of the last few years, we're still above the 1990s kinds of averages. I mean, these numbers would look good in almost anything but the last four or five years, and I think the real difference is that interest rates were so low just a few years ago.

I mean, the Federal Reserve dropped interest rates to one percent. That lifted housing up. Now that interest rates are back to normal, houses have come down. But I don't think it's the end of the world. It obviously feels painful for a number of people, but it's clearly not a situation I think to panic in.

WILLIS: And you say it's a correction, not an outright bust, correct? WESTBURY: Right. That's right, because it's not because interest rates are too high. In fact, interest rates today are still very low, much lower than they were in the late 1990s.

Not only that, there's a lot of great things underpinning this market -- demographic factors. As people get older, they tend to own more homes, and that's a good thing for the housing market.

WILLIS: Well, I've got to tell you Brian, you're sounding a little bit like the NAR here, the National Association of Realtors. You know, a lot of pessimists out there that say you've got to pay attention to those mortgage resets out there.

WESTBURY: Right.

WILLIS: A lot of adjustable rate mortgages will reset in the coming year. And they are frightened by that.

Don't you see that as concerning?

WESTBURY: Oh, for an individual that has an adjustable rate mortgage that they got at a very low rate and they bought a bigger house than they should have, that should be frightening. And by the way, for those people, I'm suggesting they try to lock in.

Interest rates are still low. Get a fixed rate. It will save you down the road.

But for the economy as a whole, all these resets, it may sound like a large number, but we believe resets will add about $45 billion to payments in the next couple of years. And that is a very...

WILLIS: Wow, that's a big number.

WESTBURY: ... tiny -- it is a big number, but it's way less than we spend -- it's one-fifth of what we spend on gasoline every year. It's a very small portion of the economy. And so it may sound big and bad, but in the end, it's not a devastating number for the economy.

WILLIS: Let's talk about advice, though, for people who are in this circumstance. You say get a new mortgage if you can right now.

WESTBURY: Right.

WILLIS: That makes a lot of sense. Of course, everybody can't do that.

What about buyers and sellers? What do you tell them?

WESTBURY: Well, right now, we've got a panic in the streets. And, you know, there's an old rule on Wall Street and I think it applies to the housing market today. Buy when there is blood in the streets.

I think there is going to be a great many deals had in the real estate market. Maybe not today, or maybe not in every location, but over the next year as this market continues to bottom out and things get really bad, and people think it's the end of the world...

WILLIS: Right?

WESTBURY: ... that's when you should be buying.

WILLIS: All right. Well, great advice from you, Brian. Thanks for joining us today.

WESTBURY: Thank you, Gerri.

WILLIS: So much more ahead on OPEN HOUSE .

Families and finances, how to keep both safe on the Internet.

Then, is being green worth the extra green? We'll tell you what earth-friendly products won't bust your budget.

And speaking of green, could there be cash in your attic? The hidden treasures you might find in your home.

But first, your "Tip of the Day".

(BEGIN VIDEOTAPE)

WILLIS (voice over): Online passwords are the gateway to your private information. To make sure are you the only one with access, keep this in mind when selecting one: make it lengthy. Each character that you add increases protection. Use a minimum of eight. But more than 14 is ideal. Use the entire keyboard. Combine upper and lower case letters, numbers and symbols, like these.

(on camera): Better yet, combine all of that into a full sentence that's easy for you to remember.

(voice over): And finally, test it. You can find password checkers on line that tell you how strong or weak your new protection is.

That's your "Tip of the Day".

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: It's a scary reality. Your children are vulnerable to predators online.

This week, online security experts testified before a Senate committee about the need to increase awareness of online predators. But there are steps you can take to protect your child against these dangers.

Ernie Allen is the president and CEO of the National Center for Missing and Exploited Children, and he is joining us from D.C.

Now, Ernie, you say the number one rule is to really communicate with kids. But I know a lot of teens aren't great at communicating with their parents.

ERNIE ALLEN, PRESIDENT, NATIONAL CENTER FOR MISSING AND EXPLOITED CHILDREN: Well, we think it's a real challenge for parents. But just because your child is 13 years old or 14, doesn't mean that your parenting obligation is over. So keep those lines of communications open. Learn what they are doing.

WILLIS: And you want to sit down at the computer with your child, right? And then take the tour?

ALLEN: You really do. Too many parents don't know about the Internet, and too many kids don't recognize the risks. So we say to moms and dads, get your kids to teach you how to log on.

WILLIS: Wow. OK. And you say take the computer out of bedroom. It's got to be in a very public area in the home, right?

ALLEN: Absolutely. Put it in a family room or a public area of the home where parents can supervise.

WILLIS: All right.

You say that you really need to look over the shoulder of your child to know their profiles, to know their passwords even. How do you get them to share and how do you make share that you know all of the Web sites they are on?

ALLEN: Well, there are tools out there that can help, but the best tool is just an active, vigilant parent. You need to set limits.

These are kids in your home. You can set limits on television and other things. You need to do the same thing with the Internet.

WILLIS: Well, Ernie, you know, though, kids have their own language, right? I heard there is something called P911. It's like, you know, an informal warning among kids.

What does that mean?

ALLEN: Well, there are a whole host of acronyms and shorthand -- POS, "Parent over shoulder." LMRL, "Let's meet in real life."

Parent need to be alert. We provide a lot of those clues if you go to our Web site, missingkids.com. We can help parents get the tools and knowledge that they need.

WILLIS: Well, speaking of tools and knowledge, is there software that I can buy or I need to have?

ALLEN: Well, there are a great many tools. There are filters, blocking software. The major ISPs -- many ISPs have parental controls. Use them, access them. Take advantage of them.

WILLIS: You know, I know when people, you know, talk to their kids, if they come to them and say, hey, I really found a problem here, parents may not know where to turn. Is there a place to go if you actually encounter a predator online?

ALLEN: Gerri, there is. It's called cybertipline.com. Twenty- four hours a day, parents, kids, Internet service providers can report these kinds of incidents.

We operate it at the National Center for Missing and Exploited Children. We've handled over 500,000 reports. We're working with law enforcement in America and around the world to keep kids safe online.

WILLIS: Ernie, thank you so much. Important information I know every parent out there wants to know.

ALLEN: Thank you, Gerri.

WILLIS: From keeping your children safe, to keeping an eye on your finances, more and more folks are using Web sites to manage their money. There is a new crop of them, too, allowing you to look at your personal finances and track your spending habits.

It's free advice, but are these Web sites safe?

CNN Internet reporter Jacki Schechner is in D.C. to guide us through all of this.

Jacki, thanks for joining me.

JACKI SCHECHNER, CNN INTERNET REPORTER: Of course. My pleasure, Gerri.

WILLIS: You know what's really interesting about this? This isn't your mom's Quicken program. This is really very different. In fact, I've read that some two million people will use these Web sites in the next year.

Let's go on a tour here and start with the ones that organize your finances.

SCHECHNER: All right. I just want to put this into perspective for you numbers-wise, though. This is very much an emerging project.

If you take a look at something like MySpace, 70 million users.

WILLIS: Wow.

SCHECHNER: Something like facebook.com, 30 million users.

So, when we talk about two million over the course of the next year, it is very much a startup operation.

Let's take a look, first of all, at Geezeo. Now, this is a Web site -- I spoke to the founders today. They say this is a personal application Web site. It's a social finance application in that you can possibly interact with other people. But it's personal finances first.

Now, what might hold people off in the beginning is that it does ask you to add your accounts. So you can upload your checking account, your credit card account, perhaps your mortgage information.

That's all going to go online to this Web site. In order to have any sort of interactivity in terms of managing your finances, you are going to have to upload this personal information.

The other aspect of this site would be, for example, if you have problems keeping track of your credit card debt. You can find other likeminded people and go ahead and compare what you are doing to counter and fight that debt compared to what's working for them.

You can also set up goals. For example, if you want to buy an iPhone. Perhaps you don't have the money on hand -- it is a little pricey, after all.

WILLIS: Right.

SCHECHNER: You can compare with other people who are trying to reach the same goal.

WILLIS: So, Jacki, there are Web sites that help you track expenses, right?

SCHECHNER: Oh, absolutely. Now, some of these are really interesting.

You know, there is a visual site, buxfer.com, which we really liked because what you can do is plug your expenses in, and it will give you a pie chart that shows you where the bulk of your expenses are going. So, for example, I set one up here with an apartment, my gym membership, for example, you know, my cell phone bill, and then my electric bill, and it shows me obviously the bulk of my expenses are going towards rent. But isn't that the case for...

WILLIS: That's great. Lots of detail. I love that.

SCHECHNER: And what it also does is you can set it up if you have roommates, and it will remind them when it's due. Who pays the bill, who owes who what kind of money. So that we thought was a really interesting Web site in that regard.

This is really tapping into the social networking aspect when it comes to college roommates, for example, or friends who live right together after college.

BillMonk was a particularly popular one for my intern and my producer who are of the Facebook generation, in college, just out of college, because they offer you the opportunity of linking up with Facebook, the social networking site. It is very popular with college kids.

So, college roommates, for example, go out to dinner, they have a shared dinner bill of about $100. You plug in who owes what. For example, Gerri, you and I went out to dinner with my producer Eric, and you each owe me $33.34. It will send you an e-mail.

WILLIS: You know, Jacki, you know, you say it's for young people, but I've got to tell you, my husband and I can do this. We have lots of shared experiences that go to different accounts. I think it makes sense for lots of people.

SCHECHNER: Yes. No, it's really good, and it's actually very easy to understand. And you can work through it very easily.

And, you know, the goal with all of these Web sites, obviously, is your own personal diligence. You know, if you have the time to go online and make sure you input all of this, it makes a lot of sense.

WILLIS: Great idea.

SCHECHNER: But you are adding another application to your day, and we're all so busy. So it's just making time to take advantage of these things.

WILLIS: Thanks, Jacki.

You can catch Jacki every day in "THE SITUATION ROOM" from 4:00 p.m. to 6:00 p.m., and at 7:00 p.m. Eastern Time.

Still ahead on OPEN HOUSE , going green saves the environment, but does it save your money? We'll show you which products make it worth your while and which ones to stay away from.

Also coming up, hidden treasures you might find in your home when we come right back.

But first, your mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: When it comes to going green at home, there are proven realities and then there are myths. Severin Borenstein is the director of the University of California Energy Institute, and he's here to help us debunk some common misconceptions about green products.

Professor, welcome.

SEVERIN BORENSTEIN, DIRECTOR, UNIVERSITY OF CALIFORNIA ENERGY INSTITUTE: Thank you.

WILLIS: All right. Let's start with the stuff that really works. You say that it's cost effective to do some of the things that simply mean changing your habits.

What do you mean?

BORENSTEIN: Well, it's important to recognize the most sufficient way to lower your energy costs is just to improve the way we use energy around the house. That's everything from just turning off lights and making sure that you're only using the air conditioning when it's actually hotter outside than inside the house, and also doing better planning in the way we consume appliances that use energy. WILLIS: You are saying basic things first. I want to talk about CFL bulbs. You know, people say that they have a 10-year life, but in reality, when you actually use them, I have never found that they last that long.

BORENSTEIN: That's right. There are cases where the CFLs really don't last as long as the manufacturers have claimed. Particularly in situations where you are turning them on and off a lot, or when they are in recessed lighting. And if you have those cans in your ceilings where they tend to be set back into the ceiling, they sort of tend to heat up.

They still tend to last a lot longer than a typical bulb. And they can still be economic, but their most efficient use is in cases where the lights go on and are going to be on for a while.

WILLIS: All right. OK.

BORENSTEIN: And not just the ones you're turning on and off.

WILLIS: I think that's news to folks out there. I think most people hear 10 years and they expect 10 years. So it's good to know that I'm actually experiencing what a lot of people do.

Let's go to nearly cost-effective items. You know, the hybrid cars are so popular. Is that on your good list or your bad list?

BORENSTEIN: The hybrid cars really do make a lot of sense. They probably aren't going to save a lot of money. Probably, with today's gas prices, would just about break even.

WILLIS: OK.

BORENSTEIN: If gas prices go up further, they'll probably be a very good investment. But it's important to recognize those gas prices are not including all of the pollution costs that you impose when you use the gasoline. So, if you are looking to do something good for society as well, that's a pretty cost-effective way to not just help out yourself but also to help out society.

WILLIS: Thanks for joining us today.

BORENSTEIN: OK. Thank you.

WILLIS: As always, if you have an idea of how to save money, send us an e-mail to openhouse@cnn.com. And if you want to check out project savings again, check out our Web site, cnn.com/openhouse.

Still ahead, could your junk be someone else's treasure? Why you may want to think twice before dumping old stuff in the trash.

But first, this week's "Local Lowdown".

(BEGIN VIDEOTAPE)

WILLIS (voice over): Happening this weekend in San Diego, Comic- Con. Meet the creators and stars of blockbuster movies, comic books and graphics novel artists and their dedicated followers.

It's also high time for the U.S. Open SandCastle Competition. Construction begins at 10:00 a.m., ends by 3:00 p.m. But make sure you get there before 4:00 p.m., as the tides will arrive to wash them away.

And the weeklong Acura Classic kicks off. Competitors include Maria Sharapova and Venus and Serena Williams.

Or take a free tour -- that's right, a free tour at the ARCO Olympic Training Center in Chula Vista to watch athletes hone their skills for competition.

OF course, you can always stop by the beach for 70 miles of sand and surf.

That's your "Local Lowdown".

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: Wow. I never find things like that in my attic.

OK. Picture this. You're cleaning a family member's dusty old attic, and out from an old ironing board springs a bag full of diamonds. It really happened to one Florida woman, and something like that, well, it could happen to you.

Gary Piattoni is an independent appraiser in Chicago, and he's here to tell us how to find cash in your attic.

Gary, welcome.

GARY PIATTONI, INDEPENDENT APPRAISER: Thank you.

WILLIS: Good to see you.

OK. What kinds of specific types of items might have value? Because some stuff really is just junk.

PIATTONI: Right. Well, I think most people realize they're not going to have a Picasso in their attic. But there are plenty of things that are more valuable than most people think. Categories tend to include toys, dolls, games. Even vintage clothing.

WILLIS: Wow. OK. Well, let's talk about some specifics here. How about the Star Trek helmet? How much might that me worth?

PIATTONI: Well, the Star Trek astro helmet with the original box, we're talking over $1,000.

WILLIS: Wow. We're seeing it right there. OK.

How about an Elvis doll? Now, that would be something that I might actually have. PIATTONI: Right. This Elvis doll came out in the '50s, and this would be in excess of $3,000 with the original box.

WILLIS: Wow. Cool. OK.

So you say that dresses can be worth $600. But I've got to tell you, most of my dresses up in the attic, no.

What kind of dress would it have to be?

PIATTONI: Well, it would have to be something by a known designer, a label, a Pucci dress from the '60s. The psychedelic fashions are really hot right now.

WILLIS: OK. That's a great idea.

What about any books that might be worth a lot, or maybe old records? Like if you have an old Beatles? "Rubber Soul"? Any of that worth any money?

PIATTONI: Well, you know, the Beatles and Elvis still command the money in the record album, you know, collectibles. If you had it autographed it would be even better.

WILLIS: OK. So autograph really adds to the value, obviously.

What types of items are most valuable? You said before you're not going to have a painting in your attic by an old master necessarily, but are there specific things to look for?

PIATTONI: Well, you know, a good category to look for are the forgotten Christmas presents, meaning things that were wrapped and ready to go but never got delivered to the child.

WILLIS: So they're in great shape, right?

PIATTONI: And if they're mint -- exactly.

WILLIS: They're in great shape.

PIATTONI: Exactly. So it's all about condition. It's all about condition.

WILLIS: So you're talking about old toys, maybe, for example.

PIATTONI: Toys, dolls, games.

WILLIS: OK.

PIATTONI: Teddy bears.

WILLIS: Now, you gave us some prices before on some items, but clearly you might want to get an appraisal on some of this stuff. How do you go about doing that?

PIATTONI: Well there are a number of different ways to start. There are a lot of online resources where you can check completed auctions or retail listings. If you live in a metropolitan area, you may have an auction house that has a free appraisal day. Or you could call on a professional appraiser.

WILLIS: Is that expensive?

PIATTONI: It can be, so you might want to do a little legwork on your own first.

WILLIS: And any online Web sites you want to recommend that people might start with if they're just, you know, getting started in this, they're trying to figure out if their stuff is worth anything.

PIATTONI: Sure. Sure. Well, the big one is eBay. And you can do a completed search for auctions that have taken place over the past 30 days, which gives you a good sense of what's out there.

WILLIS: OK, Gary. Thanks so much for your help. I appreciate it.

PIATTONI: My pleasure. Thank you.

WILLIS: As always, we thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week, right here on CNN, and you can catch us on "Headline News" every Saturday and Sunday at 3:30 p.m. Eastern Time.

Don't go anywhere. Your top stories are next in the "CNN NEWSROOM".

Have a great weekend.

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