Monthly Archive for April, 2009

This Caterer Knows that Atmosphere Sells…Brownstones

Published
by
Editor
on April 29, 2009
in Home Selling
. 14 Comments

According to Brownstoner, a savvy caterer has added a twist to their regular secret dinner parties (you drop $60, they tell you where to go and feed you piles of delicious glory).

“The dinner parties will be “housed in (among other places) various apartments on the market… Whether you’ll dine in a Madison penthouse or on an Orchard Street rooftop is anyone’s guess,” says Daily Candy.”

Can you think of a better way to sell your apartment, other than to invite a bunch of affluent strangers over for an amazing dinner? I can’t. That’s why Brooklyn Laundry wins the cross-promotion award this month.

Open Houses Get Austere

Published
by
preynolds
on April 28, 2009
in Home Selling and Market Conditions
. 4 Comments

Is it just our imagination, or are open houses becoming more serious affairs than in years past?

We’ve been out and about this spring and we’ve noticed something about open houses: they’re more somber, business-like, efficient. Gone are the chocolate chip cookies. Gone are the scented candles. Brokers don’t even seem to be in the mood to chat us up anymore.

What’s going on? Has a moribund housing market brought brokers back down to earth? Is it that brokers can no longer afford to spring for cookies? Or have brokers just given up? Oddly enough, the open houses that we’ve been to this year have been well attended. But brokers no longer seem so intent on finding out which broker we’re working with and getting us to sign the sign-in sheet. We think they’re a little depressed.

But there’s an up side to all this. The new open house austerity feels relaxing to buyers. During the boom years, open houses seemed like high-stake affairs where a house could get sold in a day (if not an hour). Bidding wars were common. Buyers and brokers both were tied up in knots. These days, no one has big expectations of a quick sale. So forget the scented candles and cookies. These days, it’s the essentials that count — the right price, the right location, a well-maintained home. And that’s just the way it should be.

Freddie CFO Found Dead

Published
by
Editor
on April 22, 2009
in Online Resources
. 13 Comments

The acting CFO of Freddie Mac (this is where CNBC notes that Freddie stock is in the red) was found dead this morning in his suburban Virginia home. While it’s on the books as a “suicide” right now, nobody knows for sure what happened yet:


In Some Areas, Condos Gain on Single Families

Published
by
preynolds
on April 21, 2009
in Market Conditions and Progressive Trends
. 296 Comments

Is the American ideal of the single-family home going the way of trans-fat, plastic bags and the Hummer?

In New England at least, something seems to be driving up the value of condos relative to that of single-family homes. So far this year, the median single-family home price in Massachusetts is about $34,000 more than the median condo price, according to the Warren Group, which specializes in analyzing market data in Massachusetts, Rhode Island and Connecticut. Compare that to 2005 when the median price for a single-family home was $72,000 more than a condo.

The data involves just a few recent years, is highly local and still pretty sketchy, but if this really IS a trend, why is it happening?

Certainly New England is different from other areas of the country, like Florida, where speculative condos flooded the market before everything crashed. In New England things have been more restrained. Speculative building was held in check by the area’s topography, geography and zoning laws. But what else? Here are a few guesses:

  • As more first-time buyers enter the market, they buy lower-cost condos first, boosting prices of condos relative to that of single-family homes.
  • In the Boston area, foreclosures seem to be concentrated in outlying suburban areas with more single-family homes. Alternatively, dense and fashionable urban areas located close to universities and public transportation —areas usually consisting of condos — have retained value and experienced fewer foreclosures, keeping prices higher.

But does the New England experience suggest anything about the future of condos in general?

Maybe. A growing senior population in the market for a maintenance-free life, may eventually boost condo sales and prices relative to single-family homes across the country. A growing immigrant population used to tighter living quarters, urban life, and multi-family dwellings, may also boost demand for condos. Certainly young professionals may prefer condos in the city if they can avoid a long commute.

What’s happening with condos in your neck of the woods? Could the condominium replace the single-family home as the housing option of choice?

Mein Equity!

Published
by
Editor
on April 20, 2009
in Online Resources
. 15 Comments

This is one of the better parodies I’ve seen in awhile on the real estate, ahem, “adjustment”:

Back to the ‘Burbs

Published
by
kmunsell
on April 16, 2009
in Progressive Trends and Uncategorized
. 133 Comments

As they say, the more things change, the more they stay the same. Not one year ago, we nervously watched gas prices as they crept skyward each day. Heightened awareness of rising fuel costs and excess waste prompted Americans to run toward the cities, and those nestled in the ‘burbs wondered if these outlying areas would soon become ghost towns, once again blamed again for eco-hostility and more.

However not one year later, the first victims of the mortgage crisis, the ‘burbs, are showing new signs of life as the first to begin the rise from foreclosure devastation. For example, sales of existing homes increased in many regions over the last few months and much of the activity is taking place in the suburbs.  The strongest resurgence in suburban sales is occurring in the Sunbelt, including Arizona, Nevada, Florida, and California, where at the beginning of the mortgage crisis some of the greatest increases in prices caused buyers to turn to subprime loans.

Feeding the continued survival of the ‘burbs is the changing geography of the workplace as more and more employers move away from city centers. A newly released Brookings Institute report finds the steady decentralization of jobs; between 1998 and 2006, 95 out of 98 metropolitan areas saw a job shift away from the urban core, though the overall number of jobs increased in all metropolitan areas. In fact, researchers identified a shift away from city center in almost every one of the 18 major industries analyzed and more than half of all major metropolitan areas experienced rapid job sprawl.

However, it’s not only the jobs that are keeping the ‘burbs alive. The bottom line is that time and time again, the ‘burbs get the blame, but in reality suburban living is a preferential lifestyle that will not likely fade. The fact of the matter is that suburbanites like their style of living. Many enjoy a quiet, more relaxed style of living, and study after study has shown that single family homes remain a strong preference to many; Pew Research asked residents to rate overall satisfaction with their current communities and suburbanites were the most satisfied (42%) of any residential group, including those who live in cities (34%), small towns (25%), or rural areas (29%).

So throw your sticks and stones and blame the ‘burbs for what you will but know that the more things change, the more the ‘burbs are here to stay.

Neighborhood Blogs: Everybody’s Got One

Published
by
Editor
on April 16, 2009
in Online Resources and Uncategorized
. 11 Comments

I love my local neighborhood blogs. I even read the ones that aren’t close to my neighborhood. There’s something about extremely local (like, more local than the local news) that is bringing a whole new idea of community to the sparse, isolated communities in which many of us were raised.

From Cincinatti to individual neighborhoods in Brooklyn, the rise in local blogs shows an increasing demand to 1) know exactly what’s going on around you and 2) to build a community online that actually reflects your outside physical surroundings. The neighborhood of Park Slope , for example, has a listserv for Park Slope Moms that has enraged thousands of stroller-pushers when they asked for a $25 yearly subscription fee. Obviously, these moms got angry because they really, really need and rely on their online community. Maybe they will eventually forfeit a few lattes to keep it going.
 

Why do I love my own neighborhood blog? I get all the news about the latest crimes, restaurant and bar openings, community events, and bargain real estate. I always know what’s going on over the weekend. Essentially, this service is a catalyst for me to spend my money in my own neighborhood (and, say, avoid the large metropolis that is 20 minutes away). Local blogs, basically, help keep your community going.

Isn’t that nice?

Renting Becomes Respectable

Published
by
preynolds
on April 14, 2009
in Market Conditions and Progressive Trends
. 8 Comments

When all the dust has settled in the housing market and the last at-risk home has finally fallen to foreclosure, the real estate market as we have known it will have changed.

And one of the biggest changes: renters will finally get a little respect.

Already the signs of a renting revolution are in the air. Last year, a survey by The National Apartment Association found that 67 percent of renters had no immediate plans to buy a home. In fact, according to the NAA, occupancy rates in rental housing last year saw the largest annual increase since 1965. There are now more rental housing units across the country then ever — about 34.7 million units sheltering about 83 million people.

“We’re seeing more dramatic growth in renters and a decline in the number of owners,” William C. Apgar, of the Joint Center for Housing Studies at Harvard University told the Post Chronicle. “People are beginning to understand that homeownership can be a very risky venture.”

According to census data, about 67.8 percent of Americans owned their own homes in 2008, compared to a record high of 69.1 percent two years ago. Economists and housing experts predict that once we’ve pulled out of troubled economic times, only about 50 percent of us will own our own homes. In support of this prediction, census data showed that 32.3 percent of Americans were renting homes last year, up from 30.9 in 2005.

As more of us happily turn to lifetime renting, the experience of renting is likely to change dramatically.

Right now, according to Eric Belsky, the executive director of Harvard’s Joint Center for Housing Studies, America’s rental properties  are in a sad state — increasingly unaffordable, rundown, and concentrated in blighted neighborhoods. But as more Americans rent for longer and longer periods of time, they will no longer settle for second-rate product. Tomorrow’s renters will demand high-quality properties with the amenities and updates that they would expect of an owned home. Forget cheap carpets and formica countertops. More renters will rent in upscale neighborhoods, and more will expect the sorts of updates that are more common in owned homes — hardwood floors and granite countertops, for instance. More landlords may permit renovation and changes to their property, including painting walls colors and hanging pictures. Some renters may even seek longer-term Euro-style leases of three-to-five years, with the ability to bring their own modular kitchen along to their new digs. Expect new lease options and a much wider assortment of housing choices. Look for landlords to put a new priority on maintaining their properties in an effort to compete for better tenants who will be looking for better product.

In the very near future, renting may be a far more empowering and attractive experience than it is today.

If Banking Became Boring Again
Guest Post by Jeff Eckman

Published
by
Editor
on April 12, 2009
in Progressive Trends and Uncategorized
. 129 Comments

Paul Krugman’s recent op-ed piece suggests how wonderful life would be if banking became boring again. It is a brilliantly simple take on patterns in the past century of banking, and articulates something I’ve questioned for years: what do financial services do for me? What is the value of this service to anyone other than the bankers themselves?

Krugman writes, “During this first era of high finance, bankers were, on average, paid much more than their counterparts in other industries. But finance lost its glamour when the banking system collapsed during the Great Depression.”

Of course, there is great value in what people can do with capital, but should we seek capital for the sake of capital? No. We should seek capital for the sake of adding real value in the world.

Currency is a tool. Capital is a tool. We often get into trouble when we obsess more about the tool than the actual value the tool provides.

Here is my real estate take on this: mortgages should be boring. But the actual use of the mortgage, the home, the house, the life, should not. How will this change the way we see home ownership?

Give me a nice, simple, boring 30-year fixed with 5% down, and I’m a happy housing consumer and value-adder!

Test Drive Before You Buy

Published
by
kmunsell
on April 9, 2009
in Home Buying
. 21 Comments

You try on clothes, you test drive cars – you even sample food before you buy the bulk package from the warehouse store. So why wouldn’t you test drive a home before you buy? A home is one of the single, largest purchases you will  make in your lifetime.

Particularly if the budget is tight, consider taking a test whirl in a comparable home to what you’re angling to buy before making the actual purchase. By spending 6 months to a year living in the neighborhood and tracking actual housing expenses, you can gain a better understanding of the nature and scope of your purchase before you sign on that dotted line. 

Among those little details that you will discover:

  • A more accurate estimate of homeowner expenses. In addition to mortgage payments, keep an expense diary and track all costs that you would have had to pay, had you owned the home. This includes your utilities, property taxes, insurance, and repair or upgrade expenses that you would have incurred during your time, if you owned the home. For example, if the water heater goes out, log the cost. If the heater is serviced, log the cost.
  • The maintenance and responsibility required in having the home. Yards are beautiful to look at and many homeowner’s dream. But in addition to the expense of watering and care, are you willing to take on the yard work? Living in a home and getting an up close look of what type of yard maintenance is needed during the year can be an eye-opening experience.
  • The commute to here, there and everywhere. Regardless of whether you drive to work on your own or use public transportation, you’ll learn what the actual commute would be like–day in, day out and in different weather conditions.  In addition, you’ll gain firsthand experience as to proximity of shopping, doctors and the other amenities are in relation to your home.
  • The neighborhood setting. By living in the area, you’ll notice the traffic and the people patterns, and you’ll learn more about particular lots and locations than any realtor could ever tell you, and perhaps you can avoid buying the lot where parents, children and dogs congregate every morning for the 7:30 am bus stop!