Where a Slump Would Hurt Most
If the economy heads south, the hardest hit areas would be those whose job growth is tightly tied to construction. The most vulnerable spots according to a new analysis by BusinessWeek would be Riverside-San Bernadino, Calif.; San Diego, Phoenix and Las Vegas. All are places where new jobs in construction accounted for more than 20% of total payroll growth in the past year, compared to 10% nationwide. In the East, locations include Tampa-St. Petersburg, Fla.; Baltimore and Newark, N.J. “In the face of a slowdown, it’s hard to say which other sectors of the economy would step up to maintain current employment levels” in Newark and wealthy New Jersey suburbs of New York, where growth in construction jobs is masking a decline in other kinds of jobs, according to Patrick O’Keefe, CEO of the New Jersey Builders Association. NAHB estimates that building 100 single-family homes generates about 350 jobs for a year, 280 of which are local. (www.businessweek.com)
BusinessWeek (10/24/05); Peter Coy, Paul Magnusson, Christopher Palmeri
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Gulf States Brace for Real Estate Storm
The short-term effects of Hurricane Katrina are being felt in rising property values in devastated areas of the Gulf Coast. Even damaged properties fetch premiums in some areas, and undamaged homes are priced about 20% higher than pre-storm levels, says Dan Triplett, owner and president of Gulf Coast House Buyers in Gulfport, Miss. In New Orleans, the only home sales occurring are on a cash basis and the recorder’s office has not yet opened, so prices are difficult to assess. The one certainty, according to Michael Haddad, editor of New Orleans Real Estate News, is the spiraling cost of rental properties, which have spiked 40%, 50% and even 60% in some cases. As for home values, “I see them going up, but it’s hard to say by how much,” he said. “Things haven’t stabilized here yet. (www.csmonitor)
Christian Science Monitor (10/17/05); Erik Spanberg
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Architect Builds on to His Takoma Park Home With Straw
An architect in Takoma Park, Md., is transforming his 600-square-foot Craftsman bungalow with a 2,100-square-foot rear addition of straw bales and wood. Before the first frost of the season, workers have to plaster the outside of the bales with a lime and sand mixture that will harden. Metal harnesses, or laths, connect the wood and straw so the plaster will hold. Inside, the bales will be smeared with earthen plaster — a mix of sand, clay and straw — and natural pigments, creating a softer texture. The architect estimates that his addition, using roughly 275 bales of straw, will cost about $150 a square foot, compared to the average cost of building a home in the Northeast of just under $107 a square foot last year, according to NAHB. He plans to start making up the difference in lower energy costs this winter, when he expects to heat the home with about $400 worth of corn. (www.baltimoresun.com)
Baltimore Sun (10/19/05); Dorcas Taylor
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Remodeling That Makes Sense
The average payback in recent years for remodeling jobs has ranged between 79% and 86% when the home was sold, according to Remodeling magazine, with the best returns coming from bathrooms and kitchens, which recover 90%-93% of their costs. But Sal Alfano, the magazine’s editorial director, says that well-done projects can pay for themselves immediately if home prices are rising rapidly, and the return on a project can exceed 100% if it brings the house up to the standards of the neighborhood. Among the items that home buyers prize the most, according to experts, are: granite or quartz-based synthetic kitchen countertops; stainless-steel appliances; stone or real wood floors, not vinyl; mud rooms; and decks and patios. Updated flooring, all things being equal, can increase a home’s value by 5%-11%, according to a study by G. Stacy Sirmans, a professor of real estate at Florida State University. (www.kiplinger.com)
Kiplinger (11/05) Elizabeth Razzi, Pat Mertz Esswein, Amanda Friedman
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Home Sweet Home
Age-restricted housing communities are a national trend, according to Jeff Jenkins, assistant director of NAHB’s 50+ Housing Council. “It’s really hot in the mid-Atlantic states and New England,” he said. “In the past, a lot of people retired to the Sunbelt states,” but there has been a shift in the trend. In 1995, 78% of all retirement communities were built in the Sunbelt. Today, 60% are being built outside the Sunbelt. “People now want to retire close to home, where they can be near their children and grandchildren,” Jenkins said. “A lot of them still work part-time or full-time or offer consulting services.” Many active adults also want to be near metropolitan areas. In the 2000 Census, Pennsylvania was among the top five states with a growing population of people between 55 and 74. The state had 2.1 million people in that age bracket, or 17.1% of its total population. (www.ldnews.com)
Lebanon Daily News (10/17/05); Chris Sholly
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Baghdad Real Estate Market Is Booming Despite Escalating Violence
A five-bedroom river-view house in Baghdad that sold three years ago for $45,000 is now selling for $300,000 as the war-torn city’s housing market booms. Enough money has been flowing into Iraq that home values in some parts of town have increased by almost 1,000% in three years. Fixer-uppers — houses or business properties that have suffered extensive bomb or bullet damage — are particularly hot properties. A typical house in Baghdad is two stories high, with tiled floors, a tennis court-sized front yard, large rooms with high ceilings and large windows, second-story outdoor patios in front of and behind the house and a third patio on the roof for sleeping during the hot summer. Real estate agents rarely advertise sales, and many places sell without “for sale” signs. Selling homes can be dangerous. “I liked the business more back before the war,” says Abu Mohammed. “Maybe there wasn’t as much money then, but I know 10 men who owned agencies who have been murdered.” (www.rismedia.com)
RISMedia (10/17/05); Beth Bresnahan
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