Housing Market Gives Hints of a Thaw
Now that mortgage interest rates are back to near record lows, about 1.5 percentage points lower than they were last summer, Susanne Cannon, director of the Real Estate Center at DePaul University, said the question becomes: At what point will the many buyers who have been waiting to buy a house because they want to see where the floor is, be compelled to act, thinking they are getting a price they can live with and a rate they do not want to miss? Kimberly Raber, a sales assistant at a pharmaceutical company living in a cramped apartment in Vista, Calif. with her fiancé and their two children has been looking for a bigger place for six months. She liked a three-bedroom condo, but repeated negotiations with the seller yielded only a stalemate. He would not go below $377,000, and she would not go above $363,000. “Now that the rates have gone down, we’re hoping to meet in the middle,” she said. The drop in rates “has lit the fire in my business,” said Coldwell Banker agent Otha Greer. “I actually had an investor that called yesterday and she’s interested in buying five homes.” Among sellers, too, the cut is inspiring flickers of optimism. Jody and Nicholas LeCursi tried to sell their home in Jackson, Mich. for two years. The initial $102,000 price produced no nibbles, and switching agents and lowering the price to $98,000 didn’t help. In October, they took the home off the market so they could remodel a bathroom and bedroom. When the work is done, they said, they will try to sell the home again, probably at a lower price, with the buyer paying as little as $700 a month. “Why would someone want to rent if they could own and pay the same thing?” asked Ms. LeCursi, who works in rehabilitation at the University of Michigan in nearby Ann Arbor. “People need incentive. Hopefully, that rate cut will supply it.” (www.nytimes.com)
New York Times (1/26/08); David Streitfeld
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Despite Housing Slide, Real Estate Sites Sell
Although most of the real estate industry wishes it could fast-forward through 2008, Redfin, an online real estate brokerage firm based in Seattle, is reporting strong sales and increases in Web traffic. Although it is not growing as quickly as it might have in a bullish market, it is at least growing. “In September, we thought it was maybe the beginning of a very long downturn,” said Glenn Kelman, Redfin’s chief executive. “But for whatever reason, the last few months have been very strong for us.” With home sales slowing, Kelman said that “we had to get very serious about figuring out what works and what doesn’t for sellers.” The company’s analysts pored through sales and data and found that, among other things, listings that make their debuts on Fridays draw 7.7% more visitors than those introduced on Thursdays. In addition, listings priced at $351,001 receive significantly less attention online than those listed at $350,000, because of how real estate search engines filter their results. The company began disseminating such tips to clients in December, around the same time Redfin’s results began improving. Since late September, the site’s share of real estate sales in which Redfin represented the buyer rose by 23% in Seattle, to nearly 2.5%, and jumped by 176% in the San Francisco area, to nearly 1%. (www.nytimes.com)
New York Times (1/28/08); Bob Tedeschi
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Construction Company Weathering Housing Slump
Paul Epperson, president of Omni General Contractors, a high-end custom residential construction company based in Cape Coral, Fla., said that he is starting to see some sporadic activity in custom homes, with people wanting to take advantage of lower building costs. However, “overall construction will remain stagnant until we see more improvement in the economy,” he said. In the meantime, “We have cut our field staff and operating expenditures to compensate for the income reduction. Fortunately, we have long-standing relationships with local lending institutions and Realtors®. These trusted relationships, along with our stability, have provided a new source of work. We have been contracted to complete many homes left unfinished by financially troubled contractors.” (www.news-press.com)
Southwest Florida News-Press (1/27/08); Don Manley
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Weak Housing Market Helps Renovation Specialists
The weak housing market has helped give builders in the renovation business a boost, as owners unable to sell their homes spend time renovating them instead. “What seems to be happening in this economy is that fewer new homes are being built or sold,” said Ilene Techner, who founded her renovation business seven years ago and is currently working as the general contractor on eight renovation projects in metro Detroit, including the house she grew up in. “While before someone might have sold their homes, now they’re fixing the home they’re in,” she said. Lee Schwarz, executive vice president for government relations at the Michigan Association of Home Builders, said the state doesn’t have an inclusive reporting system for building permits to provide hard data for the number of projects in the state. “But I can tell you from the reports from our members, it’s true that in the economic downturn we’re in, that more people are opting to remodel and add additions to their current houses. It has grown over the last two years,” Schwarz said. (www.mcall.com)
Morning Call (1/27/08); Margarita Bauza, Detroit Free Press
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Housing Crisis Brings New Obstacles to Divorce Settlements
A slump in real estate sales never has a salutary effect on a would-be seller, but in the case of those divorcing, it makes a difficult situation worse. When Leah and her husband were divorced last year, they planned to sell their $490,000 home in Durham, Conn., split the proceeds and go their separate ways. But it’s been eight months since they put the house on the market. They have reduced the price three times, lowering it to $449,000, but only three people have looked at the house since then. Meanwhile, without money from the sale, her ex-husband, who agreed to move out of the house, can afford only a little, sparsely furnished house that is barely big enough for the regular visits from their seven-year-old daughter. “This just became this big worry for me about where she [her daughter] is going,” said Leah, who asked that her real name not be used. “And then she calls me when she’s with him and wants to come home because she’s not comfortable. It’s really a mess.” Several Connecticut divorce lawyers and real estate agents said that while the market seems dismal — particularly in certain areas — the decline in sales is not nearly as bad as it was from the late 1980s through the early 1990s. (www.mcall.com)
Morning Call (1/27/08); Kathleen Megan
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The Helping Hand These Days Often Holds a New House
Going from squalid house, or even no house, to the mansion of one’s dreams is an increasingly common, and often disorienting, experience for disaster-stricken American families such as the Herods, whose home in New Hampshire washed away last Memorial Day when the Piscataquog River left its banks. As big storms have exposed gaps in federal assistance for housing, house-gifting — a modern take on barn-raising — has become a major philanthropic trend in the U.S., experts say. Home-focused reality TV shows have helped fuel the trend and give it more visibility. Faith-based groups are among those picking up the hammers and making other key contributions. In the past few years, more than 1,000 families have received essentially free homes from New Hampshire to Mississippi. “We used to give people money toward college. Now, we give them a house,” says Dana Heller, a humanities professor at Old Dominion University in Norfolk, Va. and author of “The Great American Transformation.” Though Habitat for Humanity requires home owners to take out a mortgage, the organization has experienced the same kind of growth as in the gifted sector. Habitat has built 32,305 homes in the U.S. since 2001, more than doubling its building pace. From foundation to finish, houses are going up — sometimes in a day. A faith-based effort in East Biloxi, Miss. has built 650 homes for people who didn’t qualify for the state’s rebuilding program. Officials recently cut the ribbon on six new and free homes in Bay St. Louis, Miss. Dozens of homes have been gifted in New Orleans’ Lower Ninth Ward. (www.csmonitor.com)
Christian Science Monitor (1/28/08); Patrick Jonsson
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