Some Parts of U.S. Escape Housing Mess

In 17 locations around the U.S., many made up of small cities surrounded by large rural areas, 50% or more of home owners own their homes outright and therefore don’t have to worry about rising monthly payments or owing more than their home is worth, according to a USA Today analysis of Census data. In 123 areas, 40% or more don’t have a mortgage, and nationwide the average is almost a third. The analysis shows that areas containing higher percentages of zero-mortgage home owners are scattered across the country, from Somerset and Johnstown, Pa., to Lumberton, N.C., Sebring, Fla., and Lufkin, Texas. Most have a central city of fewer than 50,000 people. Higher percentages of mortgage-free home owners are less likely in rapidly growing areas such as Washington, D.C. (17%), Atlanta (19%) and Las Vegas (20%). Many of the places that have a high share of no-mortgage home owners never enjoyed the boom that sent housing prices soaring across much of the nation. As a result, there was no bubble to burst. “Not always do we have the best of times, nor the worst of times,” says Mark Henne, city manager in Bluefield, W.Va., a coal country town that ranks at the top with 57% of its home owners mortgage-free. “We’re not experiencing the defaults that the rest of the country is.” (www.usatoday.com)
USA Today (11/20/08); Haya El Nasser and Paul Overberg

[Return to top]

Housing Market Near Big Military Bases Doing Fine

While overall national home prices and sales are down, there are pockets in the U.S. doing well. Among them are military towns dominated by big bases, helped by steady wartime employment and by more moderate increases in values and less reckless lending than many boom areas saw during the bubble. The Associated Press reviewed housing data in four states with big military bases and found that nearby communities fared better than national averages. Some towns have even seen average home prices rise, bolstered by increased recruitment and steady defense-related employment during the wars in Iraq and Afghanistan. For example, in Clarksville, Tenn., the largest city near the sprawling Army post of Fort Campbell, Ky., more than 30,000 soldiers assigned to the base rotate in and out regularly. Many come with families in tow or return from a deployment looking for a quiet place to call home in or around the city of about 113,000. In Clarksville, the average sales prices for single-family homes increased about 6% — from $139,065 to $147,460 — in the second quarter of 2008 compared with a year ago, according to the Clarksville Association of Realtors®. While other markets tanked after home owners took subprime loans that they couldn’t afford, active and retired members of the military can use private loans guaranteed by the Department of Veterans Affairs. More than 90% of VA loans don’t require downpayments, said Judy Caden, director of the loan guarantee services. The VA says home loans have increased about 34% over the last fiscal year. (www.sfgate.com)
San Francisco Chronicle (11/23/08); Kristin M. Hall, Associated Press

[Return to top]

Keys Now, Sale Later; With Credit Tight, Buyers, Sellers Rediscover Renting to Own

Renting to own — also known as renting with an option to buy or a lease-purchase agreement — had practically vanished during the days of easy money. Now real estate professionals say the practice is reappearing as sellers grow increasingly desperate and buyers with damaged credit scores find it harder to secure mortgages. Glenn Kelman, chief executive of the Seattle-based online brokerage firm Redfin, said he has seen a spike in requests from buyers looking for listings with rent-to-own arrangements. He said his agents are telling him that home owners are also increasingly willing to consider such requests. “Normally, sellers will tell you to pound sand if you ask them for an option to rent,” Kelman said. “But now because the sellers are in a vulnerable position, they are more likely to do it.” “There is substantial risk for buyer and seller that the other won’t be able to perform given the volatility of the real estate market,” said Mark E. Simon, a real estate lawyer with Village Settlements in Montgomery County, Md. “Each side should look at each partner carefully on this.” For the seller, a depreciating market could mean that a bank will not make a loan against an agreed-upon purchase price. A rising market could mean that a home will be worth more than what was initially agreed to. A potential buyer might not be able to get their credit together during the time of the agreement. The sputtering economy could hand either side job losses or reduced hours, making it harder to abide by any deal. (www.washingtonpost.com)
Washington Post (11/22/08); Alejandro Lazo

[Return to top]

Adults-Only Housing Makes Sense for Schools

Many Chicago suburbs are embracing senior-only communities because they generate property tax revenue for school districts without adding students. Communities with age restrictions aren’t new, but they’ve been “popping up all over the place” recently despite the housing slump, said Steve Hovany, president of Strategy Planning Associates Inc. At least 36 senior-only communities have opened in the Chicago area in recent areas, and several others are being considered or are in the planning stages, Hovany said. “The schools tax them at the same rate, so basically it’s pure profit for the schools because there are no children,” said Kenneth Kessler, mayor of Mudelein, Ill., where a 700-unit development for residents 55 and older opened about a year ago and another 150-unit senior development is scheduled to break ground this winter. The housing shift is not confined to the Chicago area. A few years ago, officials in suburban Boston approved so many age-restricted developments that a state legislator decried the practice as “vasectomy zoning.” Age-restricted communities are legal under the Fair Housing Act, so long as residents are 18 or older and at least 80% of the units are occupied by at least one person who is 55 or older. Many offer a gated, country-club atmosphere with amenities targeted for “active adults.” (www.chicagotribune.com)
Chicago Tribune (11/13/08); Gerry Smith and Susan Kuczka

[Return to top]

U.S. Strikes at Landlord Bias Against Children

The federal government recently settled a complaint filed by the Department of Housing and Urban Development against the owners of Las Vegas apartments who allegedly discriminated against families, the third such case in the valley in two years. The case involved a 32-year-old mother of an infant son, who moved to the area in October 2007 from North Dakota. A $10-an-hour Wal-Mart employee at the time, she found the $465 monthly rent at the Desert Rose apartments ideal. But when the manager told her she couldn’t move in with her son, Johnson decided to leave the boy in the care of her mother, who lives in Sacramento, Calif. Six months later, that arrangement — calling six times a day, driving nine hours to visit her son on weekends — proved too much to bear and she left Las Vegas in June. According to Bryan Greene, general deputy secretary assistant at HUD’s Office of Fair Housing and Equal Opportunity, the federal government has been more aggressive in carrying out “secretary-initiated” complaints in the past three years against alleged discrimination on the basis of religion, race, nationality and families. The idea is to take on cases that seem easier to prove and affect a lot of people. In the past three years, HUD has initiated 28 cases nationwide; only six were filed in the two years before that. (www.lasvegassun.com)
Las Vegas Sun (11/24/08); Timothy Pratt

[Return to top]

Bunk Beds Are Making a Comeback, Driven by Economics and Much Cooler Designs

Furniture designers and retailers are reporting that parents are buying bunk beds as a way to squeeze more children into modestly sized homes. IKEA has seen U.S. demand grow 10% in the last year, a spokeswoman said. Los Angeles-based Nurseryworks said its sales more than doubled during the same period. The firm, best known for cribs and changing tables, said bunks are now its top seller. Several factors are at play: the growth of the home office, the sentiment among parents that sharing a bedroom is good for kids and, most recently, economics. “People maybe aren’t adding that third or fourth bedroom,” Nurseryworks co-founder Traci Fleming said. Her first wave of consumers largely consisted of urban parents buying bunk beds for, say, a cramped Manhattan co-op. But the spike in sales this year has spread across the country, she said, indicating a broad need for kids to share bedrooms. Recent survey results released by NAHB support the notion that many additions have been put on hold. Demand for remodeling, as reported for the third quarter and predicted for the immediate future, dropped to the lowest levels since the survey started in 2001. (www.latimes.com)
Los Angeles Times (11/15/08); Craig Nakano and David A. Keeps

[Return to top]