Source: Bloomberg
Mortgage Seizure Plan Sparks Bondholder Talks With County
By Jody Shenn and John Gittelsohn - Jun 29, 2012 7:17 AM PT
A California county’s top executive addressed bondholders including Angelo Gordon & Co. and AllianceBernstein LP amid mounting concern it will use eminent domain to seize mortgages packaged into securities to aid homeowners who owe more than the properties’ values.
The Association of Mortgage Investors organized a conference call on June 27 with San Bernardino County Chief Executive Officer Greg Devereaux, said Chris Katopis, the Washington-based group’s executive director. Staff and members of other trade organizations were also invited to participate, he said, amid speculation the unprecedented strategy may serve as a template for other areas.
“I told them we haven’t decided to do anything yet,” Devereaux said yesterday in a telephone interview. “I said we have a very large problem that’s causing severe economic problems and part of our exploring ways to deal with it is hearing from people like those representatives of the securities industry.”
Eighteen trade groups including the American Bankers Association, National Association of Home Builders and Securities Industry and Financial Markets Association sent letters yesterday to California officials expressing their “strong objection.” They warned it would “actually further depress housing values in the county by restricting the flow of credit to home buyers.” The county is the largest by area in the U.S., excluding Hawaii and Alaska, according to its website.
Stabilize Markets
Advocates led by Mortgage Resolution Partners LLC say the strategy would help stabilize housing markets by reducing foreclosures and that it’s legally possible. The firm, which proposed the initiative, seeks to provide services including aid arranging the financing that local governments would need to purchase non-delinquent loans before cutting the balances and then refinancing borrowers into new debt. Asset managers and trade groups say that may be unlawful or unfair, and create bond losses that hurt other Americans and restrict lending.
“This gets an ’A’ for creativity but what are you actually accomplishing?” said Jonathan Lieberman, head of residential- mortgage securities at New York-based Angelo Gordon, which oversees about $24 billion. “The benefit to a few selected homeowners and the profits for the private sponsor will be vastly outweighed by the harm to responsible citizens, homeowners and investors. That’s not a legitimate ’public use’ for purposes of eminent domain.”
Forced Sales
The plan may affect 3,165 loans, with $1 billion in balances, in the two San Bernardino cities exploring it, according to a report yesterday by Amherst Securities Group LP. If extended to the rest of California, it might cover 214,355 mortgages, or $87.3 billion, with the amount elsewhere in the U.S. totaling 314,339 loans, or $69.5 billion, the firm said.
The proposal “does not sit well with anyone” in the market for home-loan securities, said Vincent Fiorillo, a senior portfolio manager at DoubleLine Capital LP, saying he was speaking as president of the mortgage-investor group. “We are going to try to make alternative suggestions to San Bernardino county.”
DoubleLine, which is based in Los Angeles, has about $35 billion in assets under management. Mike Canter, a portfolio manager at AllianceBernstein, is troubled that the proposal focuses on only one part of the market, a slice where principal forgiveness is already being used more often than in others, he said. The New York-based firm oversees about $400 billion.
Eminent Domain
San Bernardino is exploring the strategy along with the cities of Fontana and Ontario there. An agreement approved last week granted them the authority to study and create a program.
Robert Shiller, the economics professor at Yale University and co-creator of the S&P/Case-Shiller home-price indexes, supported the idea in a June 23 op-ed in the New York Times. By using eminent-domain powers, municipalities can force the sale of private property at prices deemed to be fair-market values if doing so serves a public purpose.
Other trade groups invited to the call this week included the Association of Institutional Investors, Securities Industry and Financial Markets Association and American Securitization Forum, Katopis said. The two latter organizations had begun publicly signaling opposition to the proposal.
“We had a very constructive dialog, and we have agreed to continue this dialog,” Katopis said, referring to the conference call. “AMI remains concerned and strongly opposed to San Bernardino’s plan as we understand it.”
Damaged Bondholders
ASF Executive Director Tom Deutsch said his staff didn’t join the call. His group is exploring whether a program would be “a legal and appropriate use of government power,” he said June 27. Members of Sifma, Wall Street’s largest lobbying organization, have “very serious concerns,” saidKen Bentsen, an executive vice president.
Damaged bondholders may include pension funds such as California Public Employees’ Retirement System that oversee money for retirees living in the areas, mutual funds and real estate investment trusts owned by retail investors, and government-tied holders such as American International Group Inc. (AIG), Fannie Mae (FNMA) and the federal public-private investment funds started in the financial crisis, Angelo Gordon’s Lieberman said.
Steven Gluckstern, the head of San Francisco-based Mortgage Resolution, said no bondholders will be hurt because the loans would be bought for amounts that could be objected to in court.
Fair Value
“The owner of the loan today would get fair value for it,” he said yesterday in a telephone interview. “I just think they haven’t actually looked at the facts.”
Based on mortgage-bond contracts, loan servicers and trustees probably have no obligation to object to the prices offered, leaving investors forced to accept amounts that are too low, Laurie Goodman, the Amherst analyst, said in her report.
An e-mail to the press office of Calpers this week wasn’t returned. James Ankner, a spokesman for New York-based AIG, declined to comment.
Mortgage Resolution’s proposal covers only loans in securities without government backing. While that excludes mortgages held by banks or guaranteed by Fannie Mae and Freddie Mac, the two government-supported firms also own those so-called non-agency bonds.
The Federal Housing Finance Agency, the overseer of Fannie Mae and Freddie Mac, “is reviewing this proposed use of eminent domain,” Stefanie Johnson, a spokeswoman, said in an e-mail.
Flat Fees
Gluckstern said his firm’s own potential role is misunderstood. It would charge flat per-loan fees for work managing the program, rather than profiting by buying and then reselling loans itself, he said.
It is “deep in conversations” with entities that may provide the needed, non-recourse financing to municipalities. Governments could likely resell debt after a refinancing for more than its purchase price and use the gain to pay interest to or share profits with those lenders, he said.
Devereaux, the county CEO, said an authority created to explore the program will probably next month begin the process of writing a request for proposals. He said “multiple” non- profit groups had also expressed interest in participating.
Scott Simon, the mortgage head at Pacific Investment Management Co., which runs the world’s largest bond fund, said the initiative could undermine investor desire to lend to homeowners. Government-backed programs have accounted for more than 90 percent of new mortgages since 2008 amid tumbling home values and soaring defaults.
‘Monster Payments’
“It would put another nail in the coffin of the private mortgage market,” Simon said. “It just means you’re going to need to have monster credit scores and monster down payments if you’re ever going to have a private market.”
Pimco is among investors that say they support greater targeted use of principal forgiveness for “underwater” borrowers with loans backing their bonds. More than 20 percent of U.S. homeowners with mortgages owe more than their property’s values, according to data firm CoreLogic Inc. About half of the homes with mortgages in San Bernardino are underwater, Devereaux said.
“We think this accelerates the clean-up of the problems that are preventing the private-label securitization market from coming back,” Gluckstern said.
URL to original article: http://www.builderonline.com/builder-pulse/opposition-surges-against-california-mortgage-seizure-plan.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 29, 2012
Fewer banks say they're tightening lending standards
Source: Housingwire
By Jon Prior
Fewer banks tightened underwriting standards, while a slightly more than last year even eased them, according to a survey conducted by the Office of the Comptroller of the Currency. The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system. Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011. "Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year," the OCC said in the report. Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing. But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling "there is a slow continued trend from tightening to unchanged standards." "This year's survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes," said John Lyons, chief national bank examiner at the OCC. "Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans."
URL to original article: http://www.builderonline.com/builder-pulse/fewer-banks-say-they-re-tightening-lending-standards.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Jon Prior
Fewer banks tightened underwriting standards, while a slightly more than last year even eased them, according to a survey conducted by the Office of the Comptroller of the Currency. The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system. Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011. "Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year," the OCC said in the report. Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing. But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling "there is a slow continued trend from tightening to unchanged standards." "This year's survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes," said John Lyons, chief national bank examiner at the OCC. "Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans."
URL to original article: http://www.builderonline.com/builder-pulse/fewer-banks-say-they-re-tightening-lending-standards.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 28, 2012
Home prices may have found a floor: Capital Economics
Source: Housingwire
Home prices have found their floor for the most part and are even trending upward in certain markets, said Paul Diggle, property economist for Capital Economics. Diggle said seasonal adjustments along with a high level of distressed home sales could be giving the misleading impression that home prices are strengthening in recent months. But he says even when accounting for these market distortions, "it appears that home prices have found a floor and, on some measures at least, are rising modestly." Diggle points out that both the Case-Shiller and CoreLogic home price indices reported gains in February, March and April. "Indeed annualized growth over that period was 6.2% and 10.9%, respectively, on the two indices—higher than our already above-consensus forecast for house prices to increase by 2% this year," Diggle said. Diggle said it's possible for home prices to in fact grow further this year if a solution is found for the euro-zone crisis, leading to a loosening in global credit conditions. However, with those issues unresolved, Diggle says Capital Economics will stick to its current forecast. "The good news is that the year-over-year change in house prices has improved noticeably in recent months too," he added. "Case-Shiller house prices have gone from falling at a rate of 4.5% year-over-year early last year, to a more moderate 1.9% year-over-year now. Meanwhile, CoreLogic house prices actually rose by 1.1% year-over-year in April. In other words, the recent improvement in house prices, although not quite as strong as the headline numbers suggest, appears to be genuine."
URL to original article: http://www.housingwire.com/content/home-prices-may-have-found-floor-capital-economics
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices have found their floor for the most part and are even trending upward in certain markets, said Paul Diggle, property economist for Capital Economics. Diggle said seasonal adjustments along with a high level of distressed home sales could be giving the misleading impression that home prices are strengthening in recent months. But he says even when accounting for these market distortions, "it appears that home prices have found a floor and, on some measures at least, are rising modestly." Diggle points out that both the Case-Shiller and CoreLogic home price indices reported gains in February, March and April. "Indeed annualized growth over that period was 6.2% and 10.9%, respectively, on the two indices—higher than our already above-consensus forecast for house prices to increase by 2% this year," Diggle said. Diggle said it's possible for home prices to in fact grow further this year if a solution is found for the euro-zone crisis, leading to a loosening in global credit conditions. However, with those issues unresolved, Diggle says Capital Economics will stick to its current forecast. "The good news is that the year-over-year change in house prices has improved noticeably in recent months too," he added. "Case-Shiller house prices have gone from falling at a rate of 4.5% year-over-year early last year, to a more moderate 1.9% year-over-year now. Meanwhile, CoreLogic house prices actually rose by 1.1% year-over-year in April. In other words, the recent improvement in house prices, although not quite as strong as the headline numbers suggest, appears to be genuine."
URL to original article: http://www.housingwire.com/content/home-prices-may-have-found-floor-capital-economics
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 27, 2012
Buying in: 10 tips to get into a good home
Source: Forbes
Buyers spend a lot of time looking at properties online, touring homes on the Sunday open house circuit, and talking to their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions. As the home buying market starts to heat up again, here are ten things you should consider when choosing your next home. 1. Location, location, location Perhaps nothing is more important than the three L’s, and there’s a reason why it’s said three times. Location is extremely important when it comes time to sell. You can have the worst house in the world with the ugliest kitchen and bath. But put it on a great block or in a good school district, and your home will be coveted. Location location location matters on so many different levels. At the highest level is the town where the house is located, then the school district, then the neighborhood and the block — right down to the location of the lot on the block. Keep all of this in mind when shopping. Also remember that while real estate markets rise and fall, no one can take a great location away from you. 2. The school district The school district is right up there on the list of what’s most important to many buyers. It’s not uncommon for buyers to start their search based solely on the school district they want to be in. Parents want their kids to go to the best school, which can drive up prices of homes in those districts. Even though you might not have children, buying a home in a good school district is always smart. If the schools are desirable, homes tend to hold their value. As a homeowner, you should always be aware of how the schools are doing, not unlike being aware of your roof’s condition, the neighborhood development or city government. 3. The home’s position on the lot Where the home sits on the lot in relation to the street or the overgrown oak are key elements in picking out a home. In the case of a condo, an end unit vs. an interior unit is a key consideration. You may have chosen the most beautifully renovated home in the best school district and figure all is good. But if the main living areas are shaded by a neighbor’s extension or the master bedroom looks into the neighbors’ family room, you may have a location problem. Light or privacy may not be a hot button for you, but chances are, they might be concerns for a future buyer. 4. Crime It’s a good idea to check the latest crime figures for a neighborhood. It can give you a good snapshot about the number and severity of crimes over a time period. So much information is online nowadays that when you find your perfect home, a quick Internet search on the area should provide you with the much-needed information. Most municipalities post their police blotters or crime statistics online these days. Don’t freak out if you notice more crime than what you’d have expected. Crime, especially petty crime, is everywhere. If you’re new to the area, consult with your real estate agent if you have concerns. 5. Walkability More than ever, ‘walkability’ is becoming a key factor in the search process. There are entire websites, apps and algorithms that help people figure out how walkable their future home is. As a matter of fact, Zillow even has a Walk Score for most homes. As people get out of their cars and slip into their Keds, they want a home in a walkable neighborhood. People put high value on the ability to walk to a store, school, work or public transportation. The more we move away from cars and the more we see invested in public transportation over the coming decades, the more of a huge value-add walkability will become. 6. The neighborhood’s character You may have found the absolute most perfect home, on the best block, in the best school district and on a great lot. But there could be circumstances outside your control that may give you pause — specifically, the character of the surrounding neighborhood. Check out the area late at night, early morning and in the middle of the day. See if there are any odd weather or traffic patterns and try to observe some of the neighbors. You may even go so far as talking to some neighbors. It’s important to walk around, open your eyes and ears and make sure there isn’t anything you’re overlooking. That next-door neighbor practicing drums in the garage at 9 p.m. could be a source of immediate neighbor conflict. Go into it with eyes wide open. 7. Don’t buy the best house on the block Simply put, avoid buying the best house on the block because there may not be any room for your investment to grow (unless you physically have the house moved to a better neighborhood). It’s better to buy the worst house on the best block, because you can improve the house to add value to an already great location. 8. Is it a fixer-upper? If you’re buying a fixer-upper, make sure you understand what you’re getting into. Did you set out to buy a home that needed work? Or does the home just happen to be in the most desirable neighborhood, the block of your dreams? Do your homework upfront. If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes. Have the property inspected so that you know exactly what you’re getting yourself into. Sometimes, what appears to be a simple kitchen needing cosmetic work turns out to be a huge project. Ask yourself repeatedly if your life can support a home renovation. Not only does a renovation take money, it takes time, energy and emotional stress. 9. Will the home hold its value? A good real estate agent who’s been working the neighborhood for some time can vouch for the long-term value or investment potential of the property. But be sure to find ways to add value, or at least be certain the home will hold its value. The market may be strong when you purchase, but ask yourself, “Am I in a seller’s market?” “What would happen to this property if the market changed tomorrow”? Check out the median home value in the neighborhood as it compares to neighborhoods around it. The Zillow Home Value Index gives you one, five, and 10-year snapshots of how home values have gone up or down in neighborhoods and cities. 10. Taxes, dues and fees Many people overlook the monthly fees associated with homeownership. Nearly every property will have taxes, and any sort of planned community or homeowners association (HOA) will have regular assessments. Be sure that the amount of property tax and assessments are clear from the get-go. If in doubt, go to city hall or do research online. If you’d be buying into a condo complex, be sure to get your hands on the meeting minutes, financials of the HOA and the condo documents. Any mention of changes coming down the pike? Does the HOA seem well funded? It could take one quick $10K assessment to immediately affect property values if you need to turn around and sell your new home. And any uncertainty about the building, its integrity or the financials could scare off buyers when it’s time to sell.
URL to original article: http://www.builderonline.com/builder-pulse/buying-in--10-tips-to-get-into-a-good-home.aspx?cid=BP:062512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Buyers spend a lot of time looking at properties online, touring homes on the Sunday open house circuit, and talking to their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions. As the home buying market starts to heat up again, here are ten things you should consider when choosing your next home. 1. Location, location, location Perhaps nothing is more important than the three L’s, and there’s a reason why it’s said three times. Location is extremely important when it comes time to sell. You can have the worst house in the world with the ugliest kitchen and bath. But put it on a great block or in a good school district, and your home will be coveted. Location location location matters on so many different levels. At the highest level is the town where the house is located, then the school district, then the neighborhood and the block — right down to the location of the lot on the block. Keep all of this in mind when shopping. Also remember that while real estate markets rise and fall, no one can take a great location away from you. 2. The school district The school district is right up there on the list of what’s most important to many buyers. It’s not uncommon for buyers to start their search based solely on the school district they want to be in. Parents want their kids to go to the best school, which can drive up prices of homes in those districts. Even though you might not have children, buying a home in a good school district is always smart. If the schools are desirable, homes tend to hold their value. As a homeowner, you should always be aware of how the schools are doing, not unlike being aware of your roof’s condition, the neighborhood development or city government. 3. The home’s position on the lot Where the home sits on the lot in relation to the street or the overgrown oak are key elements in picking out a home. In the case of a condo, an end unit vs. an interior unit is a key consideration. You may have chosen the most beautifully renovated home in the best school district and figure all is good. But if the main living areas are shaded by a neighbor’s extension or the master bedroom looks into the neighbors’ family room, you may have a location problem. Light or privacy may not be a hot button for you, but chances are, they might be concerns for a future buyer. 4. Crime It’s a good idea to check the latest crime figures for a neighborhood. It can give you a good snapshot about the number and severity of crimes over a time period. So much information is online nowadays that when you find your perfect home, a quick Internet search on the area should provide you with the much-needed information. Most municipalities post their police blotters or crime statistics online these days. Don’t freak out if you notice more crime than what you’d have expected. Crime, especially petty crime, is everywhere. If you’re new to the area, consult with your real estate agent if you have concerns. 5. Walkability More than ever, ‘walkability’ is becoming a key factor in the search process. There are entire websites, apps and algorithms that help people figure out how walkable their future home is. As a matter of fact, Zillow even has a Walk Score for most homes. As people get out of their cars and slip into their Keds, they want a home in a walkable neighborhood. People put high value on the ability to walk to a store, school, work or public transportation. The more we move away from cars and the more we see invested in public transportation over the coming decades, the more of a huge value-add walkability will become. 6. The neighborhood’s character You may have found the absolute most perfect home, on the best block, in the best school district and on a great lot. But there could be circumstances outside your control that may give you pause — specifically, the character of the surrounding neighborhood. Check out the area late at night, early morning and in the middle of the day. See if there are any odd weather or traffic patterns and try to observe some of the neighbors. You may even go so far as talking to some neighbors. It’s important to walk around, open your eyes and ears and make sure there isn’t anything you’re overlooking. That next-door neighbor practicing drums in the garage at 9 p.m. could be a source of immediate neighbor conflict. Go into it with eyes wide open. 7. Don’t buy the best house on the block Simply put, avoid buying the best house on the block because there may not be any room for your investment to grow (unless you physically have the house moved to a better neighborhood). It’s better to buy the worst house on the best block, because you can improve the house to add value to an already great location. 8. Is it a fixer-upper? If you’re buying a fixer-upper, make sure you understand what you’re getting into. Did you set out to buy a home that needed work? Or does the home just happen to be in the most desirable neighborhood, the block of your dreams? Do your homework upfront. If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes. Have the property inspected so that you know exactly what you’re getting yourself into. Sometimes, what appears to be a simple kitchen needing cosmetic work turns out to be a huge project. Ask yourself repeatedly if your life can support a home renovation. Not only does a renovation take money, it takes time, energy and emotional stress. 9. Will the home hold its value? A good real estate agent who’s been working the neighborhood for some time can vouch for the long-term value or investment potential of the property. But be sure to find ways to add value, or at least be certain the home will hold its value. The market may be strong when you purchase, but ask yourself, “Am I in a seller’s market?” “What would happen to this property if the market changed tomorrow”? Check out the median home value in the neighborhood as it compares to neighborhoods around it. The Zillow Home Value Index gives you one, five, and 10-year snapshots of how home values have gone up or down in neighborhoods and cities. 10. Taxes, dues and fees Many people overlook the monthly fees associated with homeownership. Nearly every property will have taxes, and any sort of planned community or homeowners association (HOA) will have regular assessments. Be sure that the amount of property tax and assessments are clear from the get-go. If in doubt, go to city hall or do research online. If you’d be buying into a condo complex, be sure to get your hands on the meeting minutes, financials of the HOA and the condo documents. Any mention of changes coming down the pike? Does the HOA seem well funded? It could take one quick $10K assessment to immediately affect property values if you need to turn around and sell your new home. And any uncertainty about the building, its integrity or the financials could scare off buyers when it’s time to sell.
URL to original article: http://www.builderonline.com/builder-pulse/buying-in--10-tips-to-get-into-a-good-home.aspx?cid=BP:062512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
NAR: Pending home sales up 13.3% over year-ago figures
Source: Housingwire
By Jacob Gaffney
Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012. "The housing market is clearly superior this year compared with the past four years," said Lawrence Yun, NAR chief economist. "Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012." The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season. On a seasonally adjusted basis, the Standard & Poor's Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($17.39 0.04%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($35.30 2.08%) home value index posted a 0.5% increase in May. Housing analysts at Goldman Sachs ($91.36 0.33%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory. "These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?" they ask. Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity. "If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process," Yun said.
URL to original article: http://www.housingwire.com/news/nar-annual-home-sales-133
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Jacob Gaffney
Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012. "The housing market is clearly superior this year compared with the past four years," said Lawrence Yun, NAR chief economist. "Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012." The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season. On a seasonally adjusted basis, the Standard & Poor's Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($17.39 0.04%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($35.30 2.08%) home value index posted a 0.5% increase in May. Housing analysts at Goldman Sachs ($91.36 0.33%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory. "These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?" they ask. Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity. "If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process," Yun said.
URL to original article: http://www.housingwire.com/news/nar-annual-home-sales-133
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 22, 2012
Perchance to dream: size matters among prospective home buyers
Source: Trulia
Trulia’s latest American Dream survey reveals that consumer optimism is rebounding– faster than the housing market itself is. Prospective homebuyers are looking at bigger homes, thinking more seriously about buying and optimistically hoping for higher home prices in both the short-term and long-term.
To get American’s take on homeownership, we worked with Harris Interactive to conduct an online survey of 2,205 U.S. adults between May 22-24 and 2,230 U.S. adults between June 4-6. For the full methodology, see here.
The Return of Super-Sized Homes
Remember when Americans started looking for smaller-sized homes after the bubble burst? Well, it turns out that downsizing was not here for good. After a few months of encouraging housing market news, the “bigger is better” way of thinking is making a comeback. Now, 27% of Americans say their ideal home size is over 2,600 square feet–up from 17% in 2011. Furthermore, the “super-sized” house category, 3,200 square feet and up, saw an even more dramatic increase in interest. While just 6% of those surveyed in 2011 expressed desire for a super-sized home, 11% now say they want a home of this size — that’s almost double a year ago.
It turns out that new-home builders spotted this growing appetite for size: the Census recently reported the average home constructed increased from 2,392 square feet in 2010 to 2,480 square feet in 2011.
Wanting a super-sized home is one thing, but getting it is another. Although newly constructed homes are getting bigger, most inventory is existing homes, including foreclosures, and the current inventory of for-sale homes skews smaller than most people’s ideal. Although 27% of Americans say they that their ideal home size is bigger than 2,600 square feet, only 22% of the currently listed homes on Trulia are actually that big. Meanwhile, the super-sized category –3,200-plus–is pretty much on the money, but the majority of available homes fall in the smaller size categories–800 to 2,000 square feet. That means many Americans may have to downsize their dreams to fit a smaller reality.
Note: An additional 11% of survey respondents answered “not sure” to the “ideal home size” question. An additional 4% of Trulia’s for-sale inventory is homes with less than 800 square feet.
Tomorrow’s homebuyers also have high hopes for amenities. In our survey, we asked current renters[1] which amenities they would love to have in the first home that they buy. While the most desired features were a master bathroom (63%), a walk-in closet (56%) and a gourmet kitchen (50%), only 26%, 35% and 9% of actual home buyers reported having these respective features in the first home. For gourmet kitchens, that’s a 41% gap between expectations and reality: time to downsize those cooking fantasies! Consumers would be wiser to set their sights on the dream amenity that’s more likely to come true: wood floors, which 47% of renters want and 35% of buyers said they had in their first home.
Renters Want to Buy, But Can They?
Even though the homeownership rate has dropped, more renters are now thinking about buying a home. Job growth, low interest rates and ever-rising rents have pushed up renter interest in home buying. Now, 78% of renters said that they plan to purchase a home someday, up from 72% in early 2011. More than a quarter of renters (27%) want to buy in the next two years, compared with 22% in 2011. That’s a big increase.
But obstacles remain. Still hung over from the housing bubble, those who wish to buy still face very serious hurdles to achieving their dream. Tellingly, 47% were concerned about being able to make a down payment, 32% said poor credit history could be an issue and 25% wondered if they would even qualify for a mortgage. Even though consumers may be more willing than ever to buy, they may be in for a rude awakening when it comes time to pull together a downpayment and apply for a loan.
Prices are going up, up…up?
With home asking prices up 1.6% quarter over quarter nationally, and in positive territory in 86 of the 100 largest metros (according to the Trulia Price Monitor), it’s not surprising that 61% of Americans think that home prices in their local market will rise in the next year. But – get this — 58% believe that local home prices will return to their previous bubble-level peaks within the next 10 years. For residents of Pittsburgh, Dallas and other metros where prices held up well during the bubble, it makes sense to expect prices to return to their previous high in the next ten years. But residents of the hardest-hit metros, like Detroit and Las Vegas, are almost as optimistic about future price increases.
Is this irrational exuberance? Maybe. In metros where prices skyrocketed during the bubble and then plummeted, today’s prices are a lot closer to “normal” than those bubble highs were. Perhaps residents in metros with huge price drops are encouraged by all of the search activity in those areas: we’ve pointed out that far more searchers are looking for homes in places that had bigger price declines than the other way around. But that doesn’t mean people should bet on their home values returning to those crazy heights.
It’s important to dream, and dream big – this is America, after all. And the major housing indicators support renewed optimism. In our December 2011 survey, consumers told us that (1) fewer defaults and foreclosures and (2) more sales would be the two trends that would give them the most confidence in housing market recovery, and both of those measures are improving. But while some optimism is necessary for the housing market to recover, the pendulum may have swung a little too far. Too much optimism would get us back to a bubble.
URL to original article: http://www.builderonline.com/builder-pulse/perchance-to-dream--size-matters-among-prospective-home-buyers.aspx?cid=BP:062212:JUMP
For further inforamtion on Fresno Real Estate check: http://www.londonproperties.com
Trulia’s latest American Dream survey reveals that consumer optimism is rebounding– faster than the housing market itself is. Prospective homebuyers are looking at bigger homes, thinking more seriously about buying and optimistically hoping for higher home prices in both the short-term and long-term.
To get American’s take on homeownership, we worked with Harris Interactive to conduct an online survey of 2,205 U.S. adults between May 22-24 and 2,230 U.S. adults between June 4-6. For the full methodology, see here.
The Return of Super-Sized Homes
Remember when Americans started looking for smaller-sized homes after the bubble burst? Well, it turns out that downsizing was not here for good. After a few months of encouraging housing market news, the “bigger is better” way of thinking is making a comeback. Now, 27% of Americans say their ideal home size is over 2,600 square feet–up from 17% in 2011. Furthermore, the “super-sized” house category, 3,200 square feet and up, saw an even more dramatic increase in interest. While just 6% of those surveyed in 2011 expressed desire for a super-sized home, 11% now say they want a home of this size — that’s almost double a year ago.
It turns out that new-home builders spotted this growing appetite for size: the Census recently reported the average home constructed increased from 2,392 square feet in 2010 to 2,480 square feet in 2011.
Wanting a super-sized home is one thing, but getting it is another. Although newly constructed homes are getting bigger, most inventory is existing homes, including foreclosures, and the current inventory of for-sale homes skews smaller than most people’s ideal. Although 27% of Americans say they that their ideal home size is bigger than 2,600 square feet, only 22% of the currently listed homes on Trulia are actually that big. Meanwhile, the super-sized category –3,200-plus–is pretty much on the money, but the majority of available homes fall in the smaller size categories–800 to 2,000 square feet. That means many Americans may have to downsize their dreams to fit a smaller reality.
| Size (Square Footage) | Ideal (Survey) | Trulia Inventory |
| 800 to 1,400 | 8% | 29% |
| 1,401 to 2,000 | 29% | 29% |
| 2,001 to 2,600 | 25% | 17% |
| 2,601 to 3,200 | 16% | 10% |
| More than 3,200 | 11% | 12% |
Tomorrow’s homebuyers also have high hopes for amenities. In our survey, we asked current renters[1] which amenities they would love to have in the first home that they buy. While the most desired features were a master bathroom (63%), a walk-in closet (56%) and a gourmet kitchen (50%), only 26%, 35% and 9% of actual home buyers reported having these respective features in the first home. For gourmet kitchens, that’s a 41% gap between expectations and reality: time to downsize those cooking fantasies! Consumers would be wiser to set their sights on the dream amenity that’s more likely to come true: wood floors, which 47% of renters want and 35% of buyers said they had in their first home.
| Real Estate Expectations vs. Reality: Hard Pill to Swallow | ||
| Amenity | Renter Dreams2 | First-Time Homeowner Realities |
| En-suite master bathroom | 62% | 26% |
| Walk-in closet | 56% | 35% |
| Gourmet kitchen | 50% | 9% |
| Outdoor deck | 50% | 28% |
| Wood floors | 47% | 35% |
| Pre-wired entertainment system | 31% | 7% |
| Pool | 24% | 10% |
| Hot tub | 22% | 6% |
Renters Want to Buy, But Can They?
Even though the homeownership rate has dropped, more renters are now thinking about buying a home. Job growth, low interest rates and ever-rising rents have pushed up renter interest in home buying. Now, 78% of renters said that they plan to purchase a home someday, up from 72% in early 2011. More than a quarter of renters (27%) want to buy in the next two years, compared with 22% in 2011. That’s a big increase.
But obstacles remain. Still hung over from the housing bubble, those who wish to buy still face very serious hurdles to achieving their dream. Tellingly, 47% were concerned about being able to make a down payment, 32% said poor credit history could be an issue and 25% wondered if they would even qualify for a mortgage. Even though consumers may be more willing than ever to buy, they may be in for a rude awakening when it comes time to pull together a downpayment and apply for a loan.
Prices are going up, up…up?
With home asking prices up 1.6% quarter over quarter nationally, and in positive territory in 86 of the 100 largest metros (according to the Trulia Price Monitor), it’s not surprising that 61% of Americans think that home prices in their local market will rise in the next year. But – get this — 58% believe that local home prices will return to their previous bubble-level peaks within the next 10 years. For residents of Pittsburgh, Dallas and other metros where prices held up well during the bubble, it makes sense to expect prices to return to their previous high in the next ten years. But residents of the hardest-hit metros, like Detroit and Las Vegas, are almost as optimistic about future price increases.
Is this irrational exuberance? Maybe. In metros where prices skyrocketed during the bubble and then plummeted, today’s prices are a lot closer to “normal” than those bubble highs were. Perhaps residents in metros with huge price drops are encouraged by all of the search activity in those areas: we’ve pointed out that far more searchers are looking for homes in places that had bigger price declines than the other way around. But that doesn’t mean people should bet on their home values returning to those crazy heights.
It’s important to dream, and dream big – this is America, after all. And the major housing indicators support renewed optimism. In our December 2011 survey, consumers told us that (1) fewer defaults and foreclosures and (2) more sales would be the two trends that would give them the most confidence in housing market recovery, and both of those measures are improving. But while some optimism is necessary for the housing market to recover, the pendulum may have swung a little too far. Too much optimism would get us back to a bubble.
URL to original article: http://www.builderonline.com/builder-pulse/perchance-to-dream--size-matters-among-prospective-home-buyers.aspx?cid=BP:062212:JUMP
For further inforamtion on Fresno Real Estate check: http://www.londonproperties.com
Beyond 65, working, and loving it
Source: The Atlantic
For all the trauma your 401K has probably suffered over the past few years, here's a bit of news to take heart in: According to researchers at Boston College, most Americans are only going to have to work a few extra years to make it to retirement.
The new figures come out of BC's Center for Retirement Research, and are summed up in the graph below. Only about 48 percent of current working households will be ready for to pack it in and enjoy their golden years by the traditional retirement age of 65. But thanks in part to the premium Social Security recipients get from delaying their benefits, 86 percent of households will be prepared by 70.
Here's another way of looking at it. As noted before, almost half of all households will be ready to punch out by 65. Only a select few will have to work past 70.
Now here's the catch with all of this: These numbers all assume current levels of Social Security benefits, which play a major role in getting low-income households to the retirement finish line. If they change dramatically, especially for Americans at the bottom of the economic totem pole, retirement could really become a luxury for the rich.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-65--working--and-loving-it.aspx?cid=BP:062212:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
For all the trauma your 401K has probably suffered over the past few years, here's a bit of news to take heart in: According to researchers at Boston College, most Americans are only going to have to work a few extra years to make it to retirement.
The new figures come out of BC's Center for Retirement Research, and are summed up in the graph below. Only about 48 percent of current working households will be ready for to pack it in and enjoy their golden years by the traditional retirement age of 65. But thanks in part to the premium Social Security recipients get from delaying their benefits, 86 percent of households will be prepared by 70.
Here's another way of looking at it. As noted before, almost half of all households will be ready to punch out by 65. Only a select few will have to work past 70.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-65--working--and-loving-it.aspx?cid=BP:062212:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 21, 2012
Sharing house: does doubled-up mean 'pent-up'?
Source: The Washington Post
By Michael A. Fletcher
Millions of economically pressed Americans cushioned themselves against the recession by doubling up in houses and apartments, according to a Census Bureau report released Wednesday. The number of adults sharing households with family members or other individuals jumped 11.4 percent between 2007 and 2010, the report said. Overall, such living arrangements accounted for 22 million households in 2010 — or 18.7 percent of all U.S. households, compared with 17 percent in 2007. Young adults were the most likely to double up, the report said, accounting for more than half of those who moved in with family members or friends. Between 2007 and 2010, the number of adult children who lived in their parents’ homes increased by 1.2 million to 15.8 million. Those between the ages of 25 and 34 made up two-thirds of that increase, underscoring a prime reason for a broader slowdown in household formation that economists call both a symptom and a cause of the nation’s continued economic doldrums. Economists estimate that there are more than 2 million fewer occupied homes in the country than there would have been had Americans continued forming households at the rate they did before the recession. The slowdown has lowered demand for housing as well as for furnishings and appliances, placing a further drag on the economy. “Although reasons for household sharing are not discernible from the survey, our analysis suggests that adults and families coped with challenging economic circumstances over the course of the recession by joining households or combining households with other individuals or families,” said Laryssa Mykyta, a report co-author and a Census Bureau analyst. The report added that such moves proved beneficial, with many Americans escaping poverty by sharing homes with families or friends. The poverty rates for shared households were lower than for other households, although the adults who made up those households individually had high rates of personal poverty, which are defined by federal guidelines. That was especially true for young adults. Those who lived with their parents had a poverty rate of 8.4 percent, but that figure included the entire household in calculating income. If the poverty status was determined using solely individual incomes, the poverty rate for those doubled-up young adults would have been 45.3 percent, according to the Census Bureau. “It is difficult to assess the precise impact of household sharing on economic well-being,” Mykyta said. “But the higher personal poverty rates for adults heading shared households suggests that this group has fewer individual resources than their counterparts.” Overall, 27.7 percent of adults — 61.7 million people — were doubled up in households in 2007, a number that rose to 69 million, or 30.1 percent, in 2010. The Census Bureau defines “doubled up” households as those that include at least one “additional” adult — a person 18 or older who is not enrolled in school and is not a spouse or live-in partner. Americans were most likely to double up with other family members, the report found. In 2010, adult children accounted for 46 percent of those who doubled up, while parents who moved in with their adult children made up another 13 percent. Siblings, grandchildren and other relatives accounted for nearly 23 percent of those who doubled up, the report said.
URL to original article: http://www.builderonline.com/builder-pulse/sharing-house--does-doubled-up-mean--pent-up--.aspx?cid=BP:062112:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Michael A. Fletcher
Millions of economically pressed Americans cushioned themselves against the recession by doubling up in houses and apartments, according to a Census Bureau report released Wednesday. The number of adults sharing households with family members or other individuals jumped 11.4 percent between 2007 and 2010, the report said. Overall, such living arrangements accounted for 22 million households in 2010 — or 18.7 percent of all U.S. households, compared with 17 percent in 2007. Young adults were the most likely to double up, the report said, accounting for more than half of those who moved in with family members or friends. Between 2007 and 2010, the number of adult children who lived in their parents’ homes increased by 1.2 million to 15.8 million. Those between the ages of 25 and 34 made up two-thirds of that increase, underscoring a prime reason for a broader slowdown in household formation that economists call both a symptom and a cause of the nation’s continued economic doldrums. Economists estimate that there are more than 2 million fewer occupied homes in the country than there would have been had Americans continued forming households at the rate they did before the recession. The slowdown has lowered demand for housing as well as for furnishings and appliances, placing a further drag on the economy. “Although reasons for household sharing are not discernible from the survey, our analysis suggests that adults and families coped with challenging economic circumstances over the course of the recession by joining households or combining households with other individuals or families,” said Laryssa Mykyta, a report co-author and a Census Bureau analyst. The report added that such moves proved beneficial, with many Americans escaping poverty by sharing homes with families or friends. The poverty rates for shared households were lower than for other households, although the adults who made up those households individually had high rates of personal poverty, which are defined by federal guidelines. That was especially true for young adults. Those who lived with their parents had a poverty rate of 8.4 percent, but that figure included the entire household in calculating income. If the poverty status was determined using solely individual incomes, the poverty rate for those doubled-up young adults would have been 45.3 percent, according to the Census Bureau. “It is difficult to assess the precise impact of household sharing on economic well-being,” Mykyta said. “But the higher personal poverty rates for adults heading shared households suggests that this group has fewer individual resources than their counterparts.” Overall, 27.7 percent of adults — 61.7 million people — were doubled up in households in 2007, a number that rose to 69 million, or 30.1 percent, in 2010. The Census Bureau defines “doubled up” households as those that include at least one “additional” adult — a person 18 or older who is not enrolled in school and is not a spouse or live-in partner. Americans were most likely to double up with other family members, the report found. In 2010, adult children accounted for 46 percent of those who doubled up, while parents who moved in with their adult children made up another 13 percent. Siblings, grandchildren and other relatives accounted for nearly 23 percent of those who doubled up, the report said.
URL to original article: http://www.builderonline.com/builder-pulse/sharing-house--does-doubled-up-mean--pent-up--.aspx?cid=BP:062112:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
June 2012 U.S. Economic And Housing Market Outlook
Source: Freddie Mac
Rental Markets: A Sign of Strength MCLEAN, Va., June 19, 2012 /PRNewswire/ --
Freddie Mac (OTC:FMCC) released today its U.S. Economic and Housing Market Outlook for June showing that rental market activity has been a bright spot for the housing market, and due to rental demand by those postponing homeownership, further increases are expected in the coming year. Outlook Highlights Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4 percent increase in a single year. Rental vacancy rates have dropped roughly 2 percentage points over the past two years. While nominal rents rose (2 to 4 percent) during the year ending March 2012, average rent on an inflation-adjusted basis remained below where it had been for much of the decade prior to the Great Recession. Multifamily property values are up on average about 25 percent during the past two years from their trough during the first quarter of 2010, according to the National Council of Real Estate Investment Fiduciaries index, but still about 14 percent below their peak prior to the Great Recession. Starts of buildings with at least five apartments have jumped 48 percent in the first five months of this year when compared to the same period a year ago. View the video overview and download the complete June 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators. Quotes Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist. "Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well." Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter:@FreddieMac Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.
URL to original article: http://freddiemac.mediaroom.com/index.php?s=12329&item=129717
For further information on Fresno Real Estate check: http://www.londonproperties.com
Rental Markets: A Sign of Strength MCLEAN, Va., June 19, 2012 /PRNewswire/ --
Freddie Mac (OTC:FMCC) released today its U.S. Economic and Housing Market Outlook for June showing that rental market activity has been a bright spot for the housing market, and due to rental demand by those postponing homeownership, further increases are expected in the coming year. Outlook Highlights Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4 percent increase in a single year. Rental vacancy rates have dropped roughly 2 percentage points over the past two years. While nominal rents rose (2 to 4 percent) during the year ending March 2012, average rent on an inflation-adjusted basis remained below where it had been for much of the decade prior to the Great Recession. Multifamily property values are up on average about 25 percent during the past two years from their trough during the first quarter of 2010, according to the National Council of Real Estate Investment Fiduciaries index, but still about 14 percent below their peak prior to the Great Recession. Starts of buildings with at least five apartments have jumped 48 percent in the first five months of this year when compared to the same period a year ago. View the video overview and download the complete June 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators. Quotes Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist. "Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well." Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter:@FreddieMac Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.
URL to original article: http://freddiemac.mediaroom.com/index.php?s=12329&item=129717
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 20, 2012
Beyond the square foot--what's a neighborhood worth?
Source: The New York Times
The American Dream: Phase II
By ALLISON ARIEFF
Sprawl … It’s the American dream unfolding before your eyes.” That’s L. Brooks Patterson’s irresistible description of sprawl, proving yet again how masterful the stalwarts of the status quo are at messaging that which they hope to preserve in amber. In a speech to his constituents earlier this year, Patterson, the county executive of Oakland County, Mich., continued to wax poetic on the topic: “I love sprawl. I need it. I promote it. Oakland County can’t get enough of it. Are you getting the picture? Sprawl is not evil. In fact, it is good … [it] is new jobs, new hope and the fulfillment of lifelong dreams.” Patterson’s rousing stump speech for sprawl is emblematic of how we as a culture are far too invested in a vision of the American dream that doesn’t make sense in the 21st century. Over the past 30 years we’ve stripped away the supporting mechanisms of sprawl but have continued to create it. We’ve built more houses than we’ve needed — and built them farther away from jobs. This has led to longer commutes, which has created more traffic. In response, we built more highways, increasing fuel consumption and, as transportation planners acknowledge, doing little if anything to reduce traffic. It’s a vicious, seemingly endless cycle, and at its core is the notion that the American dream can exist only within the framework of the single-family home on a large lot. Indeed, we’ve become so fixated on this as the sole delivery mechanism of that American dream that we’ve spent a disproportionate amount of our collective energies (home-) improving it without considering meaningful alternative visions — or devoting at least a smidgen of attention to what’s outside the front door or down the block. Everything in our culture today reinforces this idea of home as castle (or fortress) rather than home as part of a larger whole (i.e., neighborhood). We need to find our way to the latter view, and part of that means finding a better way to talk about it. The good news is that more and more people are. It’s true that for years, homebuilders and home-sellers were touting Patterson’s sprawl-friendly sales pitch. If you were to walk into the sales center of any subdivision or master-planned community, from Modesto, Calif., to Tampa, Fla., the first question you’d be asked was, “How much square footage are you looking for?” Not “What kind of community would you like to be a part of?” But increasingly, many of those looking for places to live found that the market had nothing for them. Houses were too big, too isolated, too generic, too hard to maintain. Or they were designed for the quintessential nuclear family that exists more in our cultural imagination than in reality. Few homes offered options for aging in place, for returning college kids or elderly parents, or even decent home office space. Would-be residents lamented the lack of amenities like a café or a playground within walking distance in master-planned communities of 5,000, 10,000 or even 40,000 homes (!), an absence often explained away with “a community of this size couldn’t support it.” For years, I heard from builders and developers who said they knew there was a market for smaller, more sustainable properties — they just couldn’t get such projects to pencil out. Now, it seems those pencils have been sharpened. “The giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs” are doing an about-face, suddenly building smaller neighborhoods in and close to cities, noted an article in USA Today last month. The market slowdown, the article went on to explain, “has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.” In short, builders are recognizing that buyers (and renters, too!) value the neighborhood as much as — if not more than — the house. And what they want from that neighborhood might not be McMansions and four-car garages after all. Resale value may not in fact trump all else. Young and old, whether they’re in the city or the suburbs, want to walk to places like restaurants and shops. (And let’s stop talking about the integration of things like cafes, public transit and bike racks as “urbanizing” an area, which only reinforces the divide between two entities that are divided enough already.) People have begun to wake up to the fact that the more time spent in the car means poorer health and less time with their families — and they’re seeking shorter commutes. They’re interested in smaller homes that are easier to maintain (and less expensive to heat and cool). Young millennials and older baby boomers are also showing less and less interest in car ownership and a corresponding greater interest in public transit, walking and biking. And again, it’s likely that we’re all less interested in continuing to discuss “urban” and “suburban” as dueling polar opposites — and more interested in recognizing there’s mutual benefit to some overlap. The aforementioned changes point to the fact that a paradigmatic shift in our concept of the American dream is underway. And this shift is not just because of the recession, says Gregory Vilkin, managing principal and president of MacFarlane Partners, quoted in that USA Today piece, “It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.” The country could be moving toward something much better, something that’s less about consumption (of stuff, of such essential resources) and more about quality of life. Neighborhood groups have perhaps never been so strong a force, joining together to create an array of community-building offerings that make shared space the place to be (rather than the place to enter the garage from). Groups like Western Massachusetts Alliance to Develop Power have been building a “community economy” to address problems of jobs, housing and energy; the ever-expanding Build a Better Block shows that citizens care about their neighborhoods enough to begin to improve them on their own. It seems every day there are hybrid fix-it shops/cafes (instead of tossing that coffee maker, have a neighbor repair it and join her for a cup when it’s working again), sharing programs that encourage collaboration over competition (everything from tools to office space, babysitting services to garden plots) — even cargo-bike sharing (the latter to facilitate car-free, short-distance errands like food shopping), and an infinite number of smartphone apps to facilitate everything from easier use of public transit (Routesy or NextBus are great examples) or the effortless swapping of kids’ clothes. For years now, people have been looking for an alternative, and the market — and the culture — is responding. A recent piece in Next American City demonstrates that even parts of notoriously sprawled-out states like Florida, Georgia and South Carolina are recognizing that investments in downtown cores will pay far more dividends than investments in their peripheries. Government can play an important role here, too: Since 2009, the Obama administration’s Partnership for Sustainable Communities has supported this shift, promoting more transportation choices, equitable and affordable housing, and efforts to make government work better. And yet … there are still those who are having none of it. And they are a vocal and often breathtakingly well-funded minority. For them, the sprawl that characterized the years leading up to the financial crisis remains a dream to strive for. Any threat to the McMansion of yore is equated to “feudal socialism” (I kid you not). And these opponents not only excel at mobilizing the troops but at mastering the message. Take a look at the rhetoric of, say, the Texas Republican party, which recently passed “Resist 21” in opposition to Agenda 21, the United Nations’ sustainable communities strategy adopted in 1992. Taken together, proclaims Resist 21, those strategies aspire to “the comprehensive control of all our population and its reduction to sustainable levels and the socialization of all activities by their relocation to highly restricted urban settlement centers.” Living better and smarter shouldn’t be a partisan issue, nor should attempts at facilitating it be equated with destroying “our fundamental rights and liberties as a people.” (Come on, Texas!) It is true that advocates for livable communities err in presenting their case with soulless terms like “smart growth” and “transit-oriented development” and, yes, “Agenda 21,” which is far from anyone’s idea of “home.” Those in favor of keeping things as they are, foreclosures and foreign oil be damned, go too far in demonizing good intent. As Jeremy Madsen, the executive director of the Greenbelt Alliance explained to me recently, “Everyone from environmentalists to the Tea Party deserves a voice. Even if over the next 30 years the majority of new communities consist of town homes and apartments near transit there will still be plenty of single-family homes available for those who want them.” The only difference? People who want another option will have a greater opportunity to live their own version of the American dream.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-the-square-foot--what-s-a-neighborhood-worth-.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The American Dream: Phase II
By ALLISON ARIEFF
Sprawl … It’s the American dream unfolding before your eyes.” That’s L. Brooks Patterson’s irresistible description of sprawl, proving yet again how masterful the stalwarts of the status quo are at messaging that which they hope to preserve in amber. In a speech to his constituents earlier this year, Patterson, the county executive of Oakland County, Mich., continued to wax poetic on the topic: “I love sprawl. I need it. I promote it. Oakland County can’t get enough of it. Are you getting the picture? Sprawl is not evil. In fact, it is good … [it] is new jobs, new hope and the fulfillment of lifelong dreams.” Patterson’s rousing stump speech for sprawl is emblematic of how we as a culture are far too invested in a vision of the American dream that doesn’t make sense in the 21st century. Over the past 30 years we’ve stripped away the supporting mechanisms of sprawl but have continued to create it. We’ve built more houses than we’ve needed — and built them farther away from jobs. This has led to longer commutes, which has created more traffic. In response, we built more highways, increasing fuel consumption and, as transportation planners acknowledge, doing little if anything to reduce traffic. It’s a vicious, seemingly endless cycle, and at its core is the notion that the American dream can exist only within the framework of the single-family home on a large lot. Indeed, we’ve become so fixated on this as the sole delivery mechanism of that American dream that we’ve spent a disproportionate amount of our collective energies (home-) improving it without considering meaningful alternative visions — or devoting at least a smidgen of attention to what’s outside the front door or down the block. Everything in our culture today reinforces this idea of home as castle (or fortress) rather than home as part of a larger whole (i.e., neighborhood). We need to find our way to the latter view, and part of that means finding a better way to talk about it. The good news is that more and more people are. It’s true that for years, homebuilders and home-sellers were touting Patterson’s sprawl-friendly sales pitch. If you were to walk into the sales center of any subdivision or master-planned community, from Modesto, Calif., to Tampa, Fla., the first question you’d be asked was, “How much square footage are you looking for?” Not “What kind of community would you like to be a part of?” But increasingly, many of those looking for places to live found that the market had nothing for them. Houses were too big, too isolated, too generic, too hard to maintain. Or they were designed for the quintessential nuclear family that exists more in our cultural imagination than in reality. Few homes offered options for aging in place, for returning college kids or elderly parents, or even decent home office space. Would-be residents lamented the lack of amenities like a café or a playground within walking distance in master-planned communities of 5,000, 10,000 or even 40,000 homes (!), an absence often explained away with “a community of this size couldn’t support it.” For years, I heard from builders and developers who said they knew there was a market for smaller, more sustainable properties — they just couldn’t get such projects to pencil out. Now, it seems those pencils have been sharpened. “The giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs” are doing an about-face, suddenly building smaller neighborhoods in and close to cities, noted an article in USA Today last month. The market slowdown, the article went on to explain, “has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.” In short, builders are recognizing that buyers (and renters, too!) value the neighborhood as much as — if not more than — the house. And what they want from that neighborhood might not be McMansions and four-car garages after all. Resale value may not in fact trump all else. Young and old, whether they’re in the city or the suburbs, want to walk to places like restaurants and shops. (And let’s stop talking about the integration of things like cafes, public transit and bike racks as “urbanizing” an area, which only reinforces the divide between two entities that are divided enough already.) People have begun to wake up to the fact that the more time spent in the car means poorer health and less time with their families — and they’re seeking shorter commutes. They’re interested in smaller homes that are easier to maintain (and less expensive to heat and cool). Young millennials and older baby boomers are also showing less and less interest in car ownership and a corresponding greater interest in public transit, walking and biking. And again, it’s likely that we’re all less interested in continuing to discuss “urban” and “suburban” as dueling polar opposites — and more interested in recognizing there’s mutual benefit to some overlap. The aforementioned changes point to the fact that a paradigmatic shift in our concept of the American dream is underway. And this shift is not just because of the recession, says Gregory Vilkin, managing principal and president of MacFarlane Partners, quoted in that USA Today piece, “It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.” The country could be moving toward something much better, something that’s less about consumption (of stuff, of such essential resources) and more about quality of life. Neighborhood groups have perhaps never been so strong a force, joining together to create an array of community-building offerings that make shared space the place to be (rather than the place to enter the garage from). Groups like Western Massachusetts Alliance to Develop Power have been building a “community economy” to address problems of jobs, housing and energy; the ever-expanding Build a Better Block shows that citizens care about their neighborhoods enough to begin to improve them on their own. It seems every day there are hybrid fix-it shops/cafes (instead of tossing that coffee maker, have a neighbor repair it and join her for a cup when it’s working again), sharing programs that encourage collaboration over competition (everything from tools to office space, babysitting services to garden plots) — even cargo-bike sharing (the latter to facilitate car-free, short-distance errands like food shopping), and an infinite number of smartphone apps to facilitate everything from easier use of public transit (Routesy or NextBus are great examples) or the effortless swapping of kids’ clothes. For years now, people have been looking for an alternative, and the market — and the culture — is responding. A recent piece in Next American City demonstrates that even parts of notoriously sprawled-out states like Florida, Georgia and South Carolina are recognizing that investments in downtown cores will pay far more dividends than investments in their peripheries. Government can play an important role here, too: Since 2009, the Obama administration’s Partnership for Sustainable Communities has supported this shift, promoting more transportation choices, equitable and affordable housing, and efforts to make government work better. And yet … there are still those who are having none of it. And they are a vocal and often breathtakingly well-funded minority. For them, the sprawl that characterized the years leading up to the financial crisis remains a dream to strive for. Any threat to the McMansion of yore is equated to “feudal socialism” (I kid you not). And these opponents not only excel at mobilizing the troops but at mastering the message. Take a look at the rhetoric of, say, the Texas Republican party, which recently passed “Resist 21” in opposition to Agenda 21, the United Nations’ sustainable communities strategy adopted in 1992. Taken together, proclaims Resist 21, those strategies aspire to “the comprehensive control of all our population and its reduction to sustainable levels and the socialization of all activities by their relocation to highly restricted urban settlement centers.” Living better and smarter shouldn’t be a partisan issue, nor should attempts at facilitating it be equated with destroying “our fundamental rights and liberties as a people.” (Come on, Texas!) It is true that advocates for livable communities err in presenting their case with soulless terms like “smart growth” and “transit-oriented development” and, yes, “Agenda 21,” which is far from anyone’s idea of “home.” Those in favor of keeping things as they are, foreclosures and foreign oil be damned, go too far in demonizing good intent. As Jeremy Madsen, the executive director of the Greenbelt Alliance explained to me recently, “Everyone from environmentalists to the Tea Party deserves a voice. Even if over the next 30 years the majority of new communities consist of town homes and apartments near transit there will still be plenty of single-family homes available for those who want them.” The only difference? People who want another option will have a greater opportunity to live their own version of the American dream.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-the-square-foot--what-s-a-neighborhood-worth-.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
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