Reality Hits Investors of Vacation Properties Although baby boomers haven’t abandoned their interest in second homes, the feeding frenzy among investment purchasers has cooled and market conditions are returning more to normal, according to David Hehman, chief executive officer of EscapeHomes.com, which has about 250,000 visitors monthly. According to the experts, anybody hoping to finance their purchase by picking up occasional rental income should carefully check the supply and demand for rental units, because investors who can’t sell are likely to rent. A recent survey of its members by the Vacation Rental Managers Association found that the inventory of rentals has increased an average of 12.73% this year, up from an average annual increase of 7.3% over the past five years. With some 1 million Americans now living in Mexico, where the cost of living is 15%-30% less, Rita Feinberg, executive director of the international department at NAHB, advises that even with more American-based mortgage providers and title companies establishing offices south of the border, U.S. buyers considering purchases there need to exercise “serious due diligence” because of Mexican laws on foreign ownership. (www.chicagotribune.com)
Chicago Tribune (5/28/06); Marilyn Kennedy Melia [Return to top]
Goodbye, Garage; Home Owners Park Their Cars Elsewhere Since all a home owner has to do is park the car somewhere else, the garage is the one place in the home that can be easily transformed into a practice space, art studio or woodshop. Home owners spent $3 billion on their garages in 2004 and an estimated $3.5 billion in 2005, according to Gopal Ahluwalia, vice president of research at NAHB. Garages are the last frontier for home rehab and restoration, and home owners have been installing custom cabinets, designer work benches and name-brand tool chests in them. And some have transformed their garages from places to park into mother-in-law apartments, offices, yoga studios and gyms. “I say it’s the id of the house,” says Kira Obolensky, author of “Garage: Reinventing the Place We Work.” “You can kind of see what people are really up to. It’s got the obvious function of storing cars and also storing stuff, but people tend to go to the garage as a place to let their hair down.” (www.sacbee.com)
Sacramento Bee (5/27/06); Gina Kim [Return to top]
The Suburbs Under Siege: Home Owners Love Cul-de-Sacs, Planners Say They’re Perils While large numbers of homes are still being built on cul-de-sacs and continue to fetch premiums from buyers who appreciate the absence of through automobile traffic, opposition against them has been growing from city planners, traffic engineers, snowplow drivers and local governments. About 90% of the cities in Oregon have changed their laws to limit cul-de-sacs, while 40 small municipalities outside Philadelphia have restricted or banned them. Traffic is the most common complaint against cul-de-sacs because most of the roads in cul-de-sac neighborhoods are dead ends, forcing drivers to navigate on peripheral roads that are already overcrowded. A recent study by transportation planners in Charlotte, N.C. found that almost all of the city’s heavily congested intersections were located near residential developments from the 1960s through the ’80s that are filled with cul-de-sac neighborhoods. Suburban cul-de-sac design became popular during the housing boom following World War II, according to NAHB land planner Ed Tombari, when many families turned away from the congested grids of central cities to live on quiet cul-de-sacs with lawns and winding roads more reminiscent of the countryside. The number of roads leading in was limited by developers to ensure privacy. (www.wsj.com)
Wall Street Journal (6/2/06); Amir Efrati [Return to top]
House Fight: Urban Neighborhoods Battle the Razing of Bungalows to Build Mansions The growing practice of razing older, smaller homes in in-town neighborhoods to build suburban-sized 4,000-square-foot mansions is raising controversy and spurring government intervention. While most people still tend to move to the suburbs, there has been a recent infill trend from those who want to return closer to downtowns, especially in large metro areas like New York, Washington, Chicago, Dallas, Denver and San Francisco. Topping the National Trust for Historic Preservation’s 2002 list of most endangered places was what the group called an “epidemic” of home teardowns in historic neighborhoods. Despite the protests, bigger homes are in demand. According to NAHB, nearly one in five homes built in the U.S. by 2003 was larger than 3,000 square feet. “When they build these houses, it makes everybody’s house look bad,” said Bill Ferrigno, president of the Home Builders Association of Connecticut, where towns along the so-called Gold Coast, nearest to New York City, are struggling with the issue of in-town home owners buying for the lots, not the homes, which they eventually demolish. (www.macon.com)
Macon Telegraph (5/31/06); Giovanna Dell’Orto, Associated Press [Return to top]
Trying Out Some New Sides to Siding With the nation’s homes now at a median age of 33, according to NAHB, and a hot housing market starting to simmer down, exterior makeovers are gaining importance and home owners are finding exciting developments in the siding industry. Manufacturers are coaxing customers with new formulations and textures, expensive synthetics that replace real wood or stone and characteristics such as mildew resistance. Among the latest options are imported faux-brick veneers that cost twice as much as real brick and premium vinyl in colors such as “peach dip.” Debuting at the International Builders’ Show in January, CertainTeed’s CedarBoards are made from vinyl that is grained to look like cedar and have a rigid foam backing to increase energy-efficiency and dent-resistance. It costs about $2 a square foot uninstalled, about twice as much as traditional vinyl. Cement-based Cultured Stone (at $4.50-$5.50 a square foot) from Owens Corning is molded from real rocks, and then colored with pigments to appeal to designer tastes. One new color, “pheasant,” blends khaki, olive, gold and plum. (www.theglobeandmail.com)
Globe and Mail (6/2/06); June Fletcher, Dow Jones Service [Return to top]
Print Struggles for Share in Online Real Estate, Part 1 The print newspaper stronghold on classified advertising has undergone dramatic change in recent years. And while the real estate category for newspaper classifieds has shown annual increases in the past decade, dot-com advertising is quickly picking up market share. In just a few years the number of online classified services has mushroomed, creating a new fragmented market where newspapers are still trying to find their place. With more than 1,000 company-owned real estate offices operating under the banners of Coldwell Banker, ERA, The Corcoran Group, Sotheby’s International Realty and the Sunshine Group, brokerage company NRT Inc. hasn’t pulled the plug on print classifieds, according to Judy Reeves, its chief operating officer. “We don’t say we are pulling dollars from one (medium) and pushing to another,” she said. “We are watching the trend and putting dollars where we feel they need to go.” Of the roughly $9 billion in total annual real estate advertising, about $4.5 billion is in daily newspapers, $1.5 billion is in homes magazines, $1 billion is in television advertising, $400 million is online and about $2 billion is tied up in things like broker promotional activities, according to New York-based Corzen, which tracks online real estate listings. (www.inman.com)
Inman News (6/5/06); Jessica Swesey | 
