The housing market, which has struggled with an oversupply of homes for years, is facing a new problem: a lack of attractive inventory. “The inventory is low, so it’s hard for buyers to find their dream home,” said Joan Downing, a real-estate agent in Bloomfield Hills, Mich., a suburb of Detroit. “That’s been our challenge more than anything: finding the inventory for the clients. Nobody’s complaining about the pricing or the interest rates." In Detroit, the inventory of homes for sale was down by 28% from a year earlier, according to Realtor.com. Listings were down by 49% in Miami, by 48% in Phoenix and by 46% in Orlando. Housing inventory was down from one year earlier in all 146 markets tracked by Realtor.com except for Denver and El Paso, Texas. “On paper, all of the conditions are great for buying, but the reality doesn’t seem to match that,” said Ross Kutash, a 37-year-old attorney who has looked at more than three dozen homes in different suburbs of Los Angeles. “I wouldn’t describe it as a buyer’s market so much as no market at all.” Industry executives say shortages of well-priced and attractive homes are a bigger drag on sales than sluggish demand. “As weak as demand is, inventory has been weaker,” said Glenn Kelman, chief executive of Redfin Corp., a Seattle real-estate brokerage firm that does business in 13 states. “Right now, the absence of inventory is the limiting factor on sales volume.” (www.wsj.com) Wall Street Journal Online (10/16/11); Nick Timiraos

In 1991, Dan Driscoll of Towson, Md., and his wife, Theresa, wanted to buy a house, but the lowest mortgage rate they could find was 9%. Meanwhile, Driscoll’s parents, who were retired, were earning 3% on their savings. At Driscoll’s suggestion, his parents financed his $75,000 mortgage at a 6% rate. Now, Driscoll has taken on a different role. Earlier this year, Driscoll’s son Dan, 31, expressed an interest in buying a larger home in his father’s neighborhood. Instead of paying 4.5% for a traditional mortgage, Dan borrowed the money from his father at a 4.25% rate. The arrangement also enabled Dan to avoid paying closing costs, appraisal fees and other expenses charged by a traditional lender, Driscoll says. If financing a family mortgage was a savvy strategy in 1991, the logic is even more compelling now. Returns from the types of low-risk investments favored by retirees are tiny: The average rate on a one-year certificate of deposit is 0.4%. Mortgage rates are also at record lows, but tight lending standards have made it impossible for many young home buyers to take advantage of them. For baby boomers who are unwilling to risk their money in the stock market, financing a child’s mortgage “is an opportunity to create a win-win,” says Timothy Burke, chief executive of National Family Mortgage, a company that sets up and services intra-family loans. To date, National Family Mortgage has helped families finance more than $12 million in loans, ranging from an $18,500 downpayment to a $1.17 million refinancing. (www.usatoday.com)
USA Today (10/5/11); Sandra Block

Across New York City, rents have not only rebounded from the depths of two years ago, but are also surpassing the record high of 2007 during the real estate boom, according to figures from Citi Habitats, a large rental brokerage, and other surveys. That means a perennially frustrating process has become almost frenzied. Brokers say prospective renters need to come prepared to close a deal on the same day — ready to write a check for thousands of dollars to cover the first and last month’s rent, and the broker’s fee. For desirable apartments, forget about open houses — the best places are snapped up within a few days, or less, through private showings for brokers. Several factors are conspiring to keep rents high, brokers and real estate analysts said, citing the virtual disappearance of any incentives, a vacancy rate in Manhattan that is hovering around 1% and a shortage of new development on the horizon. Over all, the average rental price for a Manhattan apartment in September was $3,331, according to data compiled for The New York Times by Citi Habitats. Last year at the same time it was $3,131, and in 2009 it was $3,013. (www.nytimes.com)
New York Times (10/14/11); Marc Santora

For his home about 12 miles west of Chapel Hill, N.C., custom builder Michael Chandler had the luxury of clients who are as adventurous and open-minded as he is. Although they originally asked him for autoclaved aerated concrete walls that would create the thick, stone exteriors of their childhood homes in England, Chandler quickly talked the husband and wife into something more affordable, more insulating and more appropriate for North Carolina’s hot and humid weather. He saved $60,000 by suggesting a technique he had never tried before: double-stud wall construction, which cost only $4,200 more than the company’s standard 2x6 walls. That approach allowed room for nearly 12 inches of R-46 Johns Manville Spider spray fiberglass insulation between the walls and R-30 Icynene open-cell spray foam at the roofline. “We got a really good R-value at a really good cost with the double wall construction,” Chandler said. Framing was completed in less than two weeks because the walls, floor and roof were manufactured off site at local panelization plant Builders First Source. At the factory, the exterior was sheathed with OSB and then moved to the site, where crews wrapped it with Tyvek Wrinkle Wrap, two layers of asphalt felt and SpiderLath and then finished with fire-resistant stucco, which provided the Old World look the owners were after at a fraction of the cost. The 13-inch-thick walls created the same effect on the interior, with deep window jambs and sills usually found in thick masonry construction. “It’s really striking, especially where we have triple windows,” Chandler says. (www.ecohomemagazine.com)
ecohome (9/22/11); Jennifer Goodman

To see how energy-efficient builders could be in constructing homes, the Department of Energy sponsored the Building America Builders Challenge program in collaboration with several segments of the construction industry, including NAHB. One of the goals of the program is to develop technologies and techniques necessary to build cost-effective, net-zero energy homes — houses that produce as much energy as they use annually — by the year 2030. Camberley Homes, a division of Winchester Homes, built the program’s inaugural home, which was unveiled in the summer. It achieved 40% greater energy efficiency than a typical new construction, using a combination of structural and design elements to reduce energy waste. While a typical home built in the 1950s has a rating on the Home Energy Rating System index of about 150, most new constructions clock in at around 100. Camberley’s Builders Challenge home has a rating of 53. Although the model home is built, it’s still a work in progress. Sensors throughout the home collect data about the home’s temperature, humidity and water and electricity usage, and send it to the NAHB Research Center for analysis. Analysts study the data and come up with modification suggestions to further increase energy efficiency. “We are really trying to figure out best practices and solutions that are the most cost-effective, taking into account the materials and installation costs,” said Amber Woods, manager of energy programs at the Research Center. NAHB’s team worked closely with Camberley throughout the entire building process, and the home building firm hopes to implement techniques and technologies successful in the model home in their Poplar Run development in Bethesda, Md. (www.chicagotribune.com)
Chicago Tribune (10/7/11); Meg Handley, U.S. News & World Report

On a visit to Maine’s Mount Desert Island, a couple purchased a small, dark, two-story cabin made of barn wood they would later tell friends resembled an oversize outhouse. In the five years it had been on the market, the price dropped to about $300,000, from $525,000, and they purchased it for $265,000 and then paid another $200,000 to restore it, a process taking seven months. Regulations forbade expanding not only its footprint, which was just 540 square feet on the first floor, but its height as well. Even adding a deck was not permitted. Because of the building restrictions, they had only eight square feet in which to expand. Most of the house was demolished, leaving only the first and second floors and the side walls intact. The living room windows had been three feet off the ground, obliterating much of the property’s marsh view. The kitchen had a space-consuming island the size of a mattress, a stove that forced the cook to face the wall and a refrigerator that jutted, hunting-camp style, into the living room. The 14-foot-wide living room was lined with floor-to-ceiling windows. The designer added a slightly angled counter that allowed the cook to face the bay and tucked the old refrigerator in the back, covering it in blackboard paint so it could be used as a chalkboard. He replaced the roof over the sitting area with translucent corrugated polycarbonate panels, which were stronger and less expensive than skylights, but still filled the room with light, and used Eastern white pine throughout the house to keep the interior bright. In the second-floor master bedroom, he installed more floor-to-ceiling windows. And he found a use for the eight square feet: landings for two exterior stairways. (www.nytimes.com)
New York Times (10/5/11); Joyce Wadler