Better Homes, Higher Prices
Historically low mortgage rates helped to drive the average new-home price up 22% over the past four years. While price gains have been pushed into the spotlight, less emphasis has been placed on how home quality has been measured up. According to the Census Bureau, an index that tracks size, location and upscale amenities has skyrocketed from 68.1 in 1980 to 124.8 in 2002, suggesting that the quality of new housing in this country has been improving dramatically. (www.investors.com)
Investor's Business Daily (08/05/04) P. A14
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Luxury Home for Sale: 6 Bdrms, Dumpster Vu
WCI Spectrum Communities CEO Mitchell Hochberg says home buyers must be willing to compromise in terms of location if they want to live in major metropolitan areas. According to NAHB economist Gopal Ahluwalia, prime parcels are hard to come by in markets like New York, Washington, Los Angeles, San Francisco, San Diego and Boston. In turn, the dwindling supply of developable land — along with growth restrictions imposed by local governments — are blamed for soaring home prices on the East and West coasts. In order to meet demand, many builders have resorted to less desirable locations next to airports, highways, railroad tracks and low-income developments. For instance, developers in Florida have been forced to move away from the waterfront. Meanwhile, John Laing Homes is building $600,000-plus homes across from a vacant factory in Anaheim, CA. (www.wsj.com)
Wall Street Journal (08/05/04) P. D1; Hagerty, James R.; Kim, Queena Sook
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This Old House Isn't
The latest trend in residential construction is the use of new materials that are scraped, dented, worn and otherwise manipulated to make them appear old. Builders of homes costing $300,000 to $40 million are using the faux-aged look to gain a competitive edge. The trend stems from the demand for salvaged materials that emerged two decades ago; but builders are now achieving this look with newer windows, stairs and other features to meet building codes and make homes more energy-efficient than their predecessors. For instance, builders increasingly are incorporating foam beams that resemble aged wood and walls and fabrics that have been rubbed so that they appear worn, among other strategies. Many buyers prefer new substitutes that give their property an aged appearance but that do not require approval from historical societies or demand substantial maintenance as a truly old dwelling might. (www.wsj.com)
Wall Street Journal (07/30/04) P. W10; Fletcher, June
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Different Cultures Value Different Features
Home builders and designers are starting to take the needs of individual cultures into account, as immigrants make up an increasingly large segment of the home buying population. For instance, immigrant households generally tend to be larger and are more likely to combine families within one residence than U.S.-born households. Therefore, foreign-born buyers tend to seek larger properties with more bedrooms and a garage. According to Henry Cisneros, CEO of urban home builder American CityVista, Hispanic families typically prefer gas ovens and great rooms rather than living rooms. Oscar Gonzales of the Asian Real Estate Association of America, meanwhile, says that Asian immigrants are more likely to buy newer homes that accommodate their preference for feng shui — a Chinese philosophy that suggests the physical environment has an effect on one's fortune and well-being. (www.usatoday.com)
USA Today (08/05/04) P. 2B; Kirchoff, Sue
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Immigrants Chase American Dream
U.S. economists believe the flood of immigrants pouring into the country will underpin continued strength in the housing market, as these newcomers place a high priority on homeownership. Faced with language and cultural barriers, bias, lack of credit histories, the issue of legal status and escalating property prices in the high-cost markets where they tend to settle, among other obstacles, they still trail American-born citizens in terms of homeownership. In a move to capture the vast potential of the immigrant home buying population, however, the residential real-estate industry is reaching out to assist with a variety of programs covering everything from financial training to downpayment help. Home builders are working with feng shui consultants to better relate to Asian customers; the National Association of Realtors® and other groups are placing greater focus on cross-cultural marketing; and GMAC Mortgage, in conjunction with the League of United Latin American Citizens, has made a four-year commitment to provide more than $400 million in loans to Hispanic communities, to name a few initiatives. (www.usatoday.com/money/economy/housing/2004-08-05-immigrant-housing_x.htm)
USA Today (08/05/04) P. 1B; Kirchhoff, Sue
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Latino Home Buyers Focus of Study
"El Sueno de su Casa: The Homeownership Potential for Mexican-Heritage Families," a report from the University of Southern California's Tomas Rivera Policy Institute, underscores the need for bilingual outreach programs and alternative mortgages to attract Latino home buyers. A whopping 700,000 additional Latino families would achieve homeownership if such strategies were implemented, according to the study, which was funded by Freddie Mac. The survey of 1,400 Mexican families in Los Angeles, Houston and Atlanta found 84% of respondents interested in a home purchase and more than half planning to act on that desire within five years. By the end of the decade, the institute predicts that 1.5 million Latinos will have become home owners. (www.contracostatimes.com/mld/cctimes/news/9324931.htm)
Contra Costa Times Online (08/05/04)
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Ownership Gap for Single Parents
Freddie Mac reports that 69% of single fathers were home owners in 2001, but only 45% of single mothers had achieved that status. Much of the disparity can be attributed to differences in median income, with men earning $35,345 annually in 2002 and woman taking home only $25,862. According to Institute for Women's Policy Research Director Avis Jones-DeWeever, low-income women set aside as much as two-thirds of their paychecks for housing. Although demand for shelter assistance is on the rise, research by Harvard University's Joint Center for Housing Studies reveals that the growing budget deficit is spurring program cuts. (www.latimes.com)
Los Angeles Times (08/01/04) P. K4; Wedner, Diane
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Solo Performances
Fannie Mae expects 28% of all households to be headed by unmarried women by the end of the decade. Already, this demographic is outpacing its male counterpart, with the National Association of Realtors® reporting that 21% of home buyers in 2003 were single women compared to 11% who were single men. The boost in single-women buyers can be attributed to higher incomes, low interest rates, investment plans, the high divorce rate, longer life expectancies and the fact that many are postponing marriage. Single women typically buy condominiums or single-family dwellings in dense clusters, and many make the purchase with unmarried relatives or friends. However, the homeownership rate among single women lags considerably behind that of married couples — who accounted for 59% of sales in 2003 — due to the absence of knowledge about the purchase process and credit problems. Single mothers also own fewer homes than single fathers. Those who do achieve homeownership are urged to stick with well-known lenders that are less likely to engage in predatory practices as well as ensure that only their name appears on the title. (www.latimes.com)
Los Angeles Times (08/01/04) P. K1; Wedner, Diane
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Designing Spaces: More Home Owners Seek to Add Value
According to a survey of 200-plus Realtors®, interior designers and landscape architects, as much as 30% of a home's value can be tied to the deck, patio, courtyard, pool, garden and other outdoor spaces. "Designing Out: Laneventure's Home Lifestyle Report" reveals that home owners increasingly are enhancing their outdoor living areas for entertainment purposes, often modeling the design and quality after that of their interior spaces. "We're starting to see the added emphasis of style and function when it comes to designing outdoors," remarks Laneventure's Gary McCray. While home owners are able to recoup nearly 80% of the cost of kitchen upgrades, research shows that returns of more than 100% are possible for outdoor improvements. (www.businesswire.com)
Business Wire (08/04/04)
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Little Ones Figure Big in Marketing of Homes
Though real estate agents are divided on whether or not a child's opinion matters when it comes to home purchases, builders and individual sellers can take steps to appeal to younger family members. Builders often use child-friendly floor plans and decor. As for resale properties, sellers would be wise to underscore top-notch school districts, the residence's proximity to parks and playgrounds and the presence of other children in the neighborhood. Experts say parents also look for safe neighborhoods and quiet streets, large yards and spacious rooms, among other things. (www.chicagotribune.com)
Chicago Tribune (08/01/04) Sichelman, Lew
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State's Realtors Aid Home Builders' Suit Against Impact Fees
The Arkansas Realtors® Association has lent its support to the Northwest Arkansas Home Builders Association in its fight against impact fees in Bentonville. The builders group filed suit against Bentonville last year, questioning the city's power to impose the levy, equating the average $3,094-per-home fee with a tax and criticizing the inability to ensure that the fees are used appropriately. Officials in Bentonville say the ordinance stems from a 1993 court ruling that allowed the city of Marion — which had been sued by the Crittendon County Home Builders Association — to impose impact fees as long as the charges were reasonable and used for a specific purpose. The Realtors® group has contributed $2,000 toward the builders' legal costs and will provide money to cover the testimony of National Association of Realtors® government affairs representative Bob McNamara in the case. (www.ardemgaz.com)
Arkansas Democrat-Gazette (08/05/04) Walter, Matthew
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Housing: Affordability Drops During Second Quarter
The National Association of Realtors® reports a slip in its housing affordability index from 144.1 in the first quarter to a two-year low of 133.6 in the second quarter, with a reading of 100 indicating that households earning the U.S. median income make just enough to afford a median-priced dwelling. The median resale price surged 9.1% from the second quarter of 2003 to $183,800 between April and June of this year, while the median income edged up 3% to $54,884 during the same period. The decline in affordability can be attributed to rising mortgage rates and home prices. NAR economist Lawrence Yun expects the 30-year mortgage rate to hover around 7% by the close of the year. (www.chicagotribune.com/business/chi-0408030121aug03,1,6560174.story?coll=chi-business-hed)
Chicago Tribune Online (08/03/04)
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Wi-Fi + VOIP = ?
Voice over Internet protocol (VoIP) and wireless Internet technology (Wi-Fi) may soon be combined to allow wireless calls to be made over the Internet. A number of companies are working on making wireless Internet phone calls commercially practical, which would mean less traffic over cellular networks. Isen.com principal David S. Isenberg says that both price and the ability to perform Internet applications over wireless networks will drive the technology, and cellular providers are looking into the potential market to avoid losing revenue. Nextel Communications says it is interested in phones that would use Wi-Fi; diverting some calls from the cellular network could keep a company from having to increase its network. Technical issues include the short range of Wi-Fi signals, and equipment manufacturers are working on devices that combine cellular and Wi-Fi technologies. Motorola wants to create a phone that can be used indoors on a wireless network and outdoors on a cellular network, eliminating the use of a wired phone. This presents the challenge of switching a call from one network to the other without interruptions. Wi-Fi also requires more battery power. (online.wsj.com/article/0,,SB109051080284071051,00.html)
Wall Street Journal (07/26/04) P. R10; Drucker, Jesse
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