Homes: U.K. Went Cold; U.S. Could Too With little warning and in the advent of rising interest rates on primarily monthly adjustable-rate loans, housing in the United Kingdom is cooling down and going from a sellers’ to a buyers’ market. Although home price gains in that country have dwarfed those of the U.S. — climbing an average 88% between the fourth quarters of 2000 and 2004, compared to a 35% increase during that time in this country — today’s experiences there could hold a lesson for some U.S. housing markets, especially where there is a higher proportion of buyers using adjustable loans and interest-only loans. Buyers in the U.K. seem to be waking up to the idea that double-digit price gains can’t last forever, and prices have been flat overall, with small increases in some areas and declines in others. “My sense is that the U.K. market is two or three years ahead of the U.S. market,” said John Calverley, chief economist and strategist of American Express Bank in London. The U.K. housing market started to gain steam in the late 1990s, beginning with the higher-priced properties in London and spilling over to virtually every region. “Buy-to-let” became all the rage as investors shifted funds from their traditional portfolios into rental properties. A year ago, everyone believed the supply of houses for sale in Britain simply could not keep up with demand. The supply of houses for sale in March was a third greater than it was a year earlier, according to the Royal Institution of Chartered Surveyors. (www.money.cnn.com)
CNN/Money (5/4/05); Sarah Max [Return to top]
U.S. Warns Lenders to Elevate Standards Banks and other lenders have been warned by federal banking regulators to be more selective about who can get home equity loans and to review interest-only loans and mortgages that don’t require documenting a borrower’s assets and incomes. The “guidance” came in a joint warning from the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration. For consumers, this could mean it will be tougher to get some sorts of home equity loans, such as those that amount to 100% of a home’s value. Home equity lending rose 79% from $492 billion at the end of 2000 to $881 billion at the end of 2004. With average wages growing slower than inflation, many home owners have turned to home equity loans or lines of credit to make purchases, renovate their residences, consolidate credit and pay medical expenses and other bills they otherwise couldn’t afford. (www.washingtonpost.com)
Washington Post (5/17/05); Kirstin Downey [Return to top]
Species Act Leads to Suits, Not Help As a prelude to his efforts to provide meaningful reform for the Endangered Species Act, Rep. Richard Pombo (R-Calif.) last week issued a blistering 87-page study contending that the legislation has done a better job of spawning lawsuits than it has of actually protecting threatened or endangered plants and animals. Nearly three dozen lawsuits are now moving through the nation’s courts, the report says, including disputes over the western gray squirrel, the Yosemite toad, the California tiger salamander and Southern California’s unarmored threespine stickleback. The Fish and Wildlife Service, the study notes, is also responding to 40 court orders from earlier lawsuits and has received 36 additional notifications of intentions to sue over 104 species. Of the 1,300 species that are listed as endangered or threatened, only 10 have made a full-fledged recovery, Pombo says. (www.insidebayarea.com)
Fresno Bee (5/18/05); Michael Doyle [Return to top]
State Says Rare Flower Planted to Foil Project California Department of Fish and Game botanist Gene Cooley said that his agency has concluded that 22 Sebastopol meadowfoam plants found on a 21-acre site proposed for housing development were transplanted from somewhere else to stop the project from moving forward. With just weeks to go before city officials are expected to sign off on the latest draft of the environmental impact report for the 145-unit Laguna Vista site, the meadowfoam finding would have delayed construction by an additional six months or more. “This is a very unusual situation — in my experience, unique,” Cooley said. “I’ve had 25 years of endangered plant experience with state and federal agencies, and I have never known a rare plant to be introduced to a site to thwart development before.” The site has been a source of contention for five years, with opponents citing environmentally sensitive wetlands, traffic and other concerns. Previous studies of the site failed to turn up a meadowfoam. “The flowers happen to grow right inside the property development site,” said builder Scott Schellinger. “They weren’t growing in the 10 acres of open space that we’re going to give (to Fish and Game), where there are pristine wetlands that they could grow in.” (www1.pressdemocract.com)
Press Democrat, Santa Rosa (5/14/05); Mary Callahan [Return to top]
A Bold Step for Pathways — Cobblestones, Bricks Give Entry More Curb Appeal Home owners in Connecticut have been tearing up old concrete sidewalks leading to their front doors and replacing them with pavers, cobblestones or brick pathways. NAHB Vice President of Research Gopal Ahluwalia has noted that the paver trend is occurring around the country, “especially in upscale markets.” It extends to driveways, as well, he says. These walkways appeal to home buyers, he said, because poured concrete can crack, especially if the bed is too shallow. Aesthetics are also a main reason for the switch, and installations include a gray cobblestone path fanning out gently at either end, a red-brick path, tumbled cobblestones in a fancifully curving path, and dark and light gray cobblestones in a pattern that would befit an Italian piazza. (www.courant.com)
Hartford Courant (5/13/05); Joan De Natale Green [Return to top]
Living on the Fairway Offering beautiful vistas, low maintenance and a sought-after lifestyle, golf course communities are in high demand and continue to attract home buyers. The total number of golf communities in the U.S. grew from 2,481 in 1999 to 3,047 in 2004, according to the National Golf Foundation. “People like to live in and around golf course communities and will pay a premium price to do so,” said Gopal Ahluwalia, vice president of research at NAHB. “They like the looks of it, the aesthetics of it and the greenery of it. It’s definitely a trend.” Buyers will pay a 10%-15% premium on homes in golf course communities, and half of them do not even play golf, but like the country club setting, Ahluwalia said. Doug McIltrot, a division manager and vice president for Ryan Homes in Prince George’s County, Md., reports “awesome” interest in the homes the company is building in Beechtree, an upscale planned community in Upper Marlboro that will include an 18-hole golf course. “People like the lifestyle that the golf course community offers,” said McIltrot. “There’s the prestige of saying you live in a golf course community, and resale values are also very good.” Single-family homes will start in the upper $500,000 range and townhouses in the mid-$400,000s. (www.baltimoresun.com)
Baltimore Sun (5/15/05); Nancy Jones-Bonbrest [Return to top]
How to Keep a Roof Over Your Head If Home Prices Fall Through the Floor Provided they have enough money for their next downpayment, ordinary home owners shouldn’t be overly concerned if there is a slump in housing prices. Despite all of the talk of a housing bubble, many places have experienced only modest gains over the past five years. “The housing markets are not that crazy,” says Chris Mayer, director of Columbia University’s Center for Real Estate. “I think it’s a very narrow group of people who should be worried. It’s high-end properties in New York, Florida and a couple of California cities. Outside of that, I don’t think there’s a bubble.” For those who plan on staying in the same area but want to trade up to a bigger home, a slide in prices could have a silver lining. Although a price drop in your current house will hurt, the price of more expensive homes will probably decline even more, making trading up less of a stretch. (www.wsj.com)
Wall Street Journal (5/18/05); Jonathan Clements [Return to top]
Raise a Glass — Wine Cellars, Whether Grand or Modest, Are Racking Up Points With wine becoming the libation of choice for many occasions, one of the hottest trends in home building these days is the home wine cellar, according to NAHB Vice President of Research Gopal Ahluwalia. A walk-in wine cellar, he says, “is a preferred feature in upscale markets. We are not talking about storing 84 bottles in a closet. We are talking about houses in the $1 million-plus market in metropolitan areas where [extensive wine storage] is common.” When former home builder Keith Knupp began his business nine years ago of designing and building upscale wine cellars in the Atlanta area, he found little or no demand. “But my business has grown incredibly,” he says, “20-fold at least.” Knupp builds wine cellars that cost $30,000-$200,000 in his 10,000-square-foot shop in Dallas, Ga. He uses hand beams, travertine or limestone floors and old brick or stone to create the aged look that many clients want. Casual wine drinkers, on the other hand, might spend $1,000-$2,000 for an under-counter wine cooler for the kitchen. (www.ajc.com)
Atlanta Journal-Constitution (5/20/05); Tinah Saunders [Return to top]
Growth Pays for Itself in Four Years, SAHBA Finds According to a new 125-page study commissioned by the Southern Arizona Home Builders Association, the cost of government debt incurred in the Tucson area in providing services and infrastructure to those living in new homes can be paid off entirely after four years. And every year after that, growth is a revenue generator. “Five or six years ago we didn’t know if new homes paid their way,” said Ed Taczanowsky, the association’s president. “This study shows that we are paying our way and then some.” The study, which was conducted by Elliot Eisenberg, an economist at NAHB, found that in the first year after being constructed, the 9,071 new homes for which permits were issued last year in metropolitan Tucson will have resulted in: $11.1 million in local government expenditures to provide public services to new households; $114.5 million in tax and other revenue to local governments; and $149 million in local government capital investment for new infrastructure and equipment. “Home buyers are paying their way,” Eisenberg said. “The home building industry is not freeloading off existing home owners. It is helping them.” (www.tucsoncitizen.com)
Tucson Citizen (5/17/05); David Pittman [Return to top]
Hydrogen Home an Energetic Test Setting out to build a home that will limit the chemicals, dust and fumes to which his wife is allergic, Bryan Beaulieu, an engineer and inventor, has nearly finished a $2 million home that will run on hydrogen on the side of Scottsdale, Ariz.’s Troon Mountain. The home will trap sunlight in solar panels and convert it to electricity. The electricity will run a washing machine-size appliance called an electrolyzer, which separates water into hydrogen and oxygen. The hydrogen is trapped in high-pressure tanks and run through an electric generator, producing a clean electricity for lights, computers and ceiling fans. “It works just like you use natural gas,” said Beaulieu, “but with no pollution.” Like any volatile fuel, including gasoline and home heating oil, hydrogen can be explosive if not stored properly. Beaulieu used materials native to the desert and strived for resource efficiency, durability and longevity. The home’s floors are limestone; the walls and ceiling are built from cinderblock and clay; and there are no chemicals anywhere, which means no paint, no particleboard and no drywall. The steel on the outside is treated with linseed oil, and the solid walnut cabinets in the kitchen with vinegar and steel wool. (www.azcentral.com)
Arizona Republic (4/29/05); Maggie Galehouse [Return to top] |
