Good Time to Buy, Housing Expert Says
While he expects the housing slump in Colorado to drag on, Re/Max International cofounder Dave Liniger believes that it’s a great time to buy a house. “Nobody’s ever been able to time the stock market,” he told the Colorado Springs Chamber of Commerce. “Nobody can time the real estate market. The truth of the matter is, if you are a buyer, we still have historically low interest rates. We have the biggest inventory of properties in Colorado that we’ve had since 1985 or 1986. The selection is out there. And so if you’re a buyer, this is the perfect time to be buying.” Many economists are blaming the housing downturn on the collapse of the subprime lending industry, but Liniger called the subprime problem “overblown.” Subprime loans account for about $150 billion of the $9.9 trillion worth of outstanding mortgages in the nation, he said. Of the $150 billion worth of subprime mortgages, half are in foreclosure, but only about 20% of those loans reflect homes being lost by owners, he said. Instead, Liniger blames housing woes on too many adjustable rate mortgages that are having their rates adjusted upward by hundreds of dollars a month. “The market is going to stay relatively flat, for, nobody can predict, six months, a year, 18 months,” Liniger said. “But you can’t time the market. If you want to buy a house to live in, now’s the time to buy. If you want to buy a house to flip, make an investment, make a quick profit, it’s not possible in this market.” (www.gazette.com)
Colorado Springs Gazette (11/9/07); Rich Laden
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Housing Counselors Feeling Market Crunch
Officials worry that housing counselors may quit over burnout or for better jobs as demand for their services from rising delinquencies and foreclosures is soaring, said Meg Burns, director of the single-family program development office for the Department of Housing and Urban Development. “I don’t think people fully appreciate the pressure that’s being put on those counselor organizations today,” she said. “Everybody’s pointing to counseling as… (an) end-all be-all solution to this crisis and here we have all these nonprofit organizations struggling to provide services without adequate funding.” HUD has certified about 2,300 nonprofit agencies to offer financial housing counseling, a number that has remained fairly stable in recent years, which is attributed primarily to funding constraints. However, the number of counselors seeking foreclosure prevention training has jumped, according to NeighborWorks, a leading housing finance training organization. It trained 143 counselors in fiscal year 2004 compared with 1,678 in fiscal 2007 and is adding more classes to help ease the burden. Counselors must be advocates, negotiators and good listeners to cope with consumers who are angry, ashamed or confused, not knowing where to turn or what to do when they fall behind on mortgage payments. “We have folks that come in here who have stacks of unopened correspondence from the mortgage company who’s been sending them letters saying, ‘You know, you’re behind,’” said NeighborWorks counselor Chad Klawetter of Waco, Texas. (www.mercurynews.com)
Mercury News (11/10/07); Sandy Shore, Associated Press
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Seattle’s Housing Squeeze
Seattle has lost more than half of its children — almost 90,000 — since 1960, and between 2000 and 2005, its population grew by 10,000 but the growth of those under 18 rose only by slightly more than 200, according to Charles Royer, a former mayor of the city. “So today, among the 100 largest cities in America, only San Francisco has a smaller per capita percentage of kids. We could soon be No. 1,” he said. “The other day, a Seattle firefighter told a city council hearing on housing, ‘It is very hard to qualify to be a firefighter in Seattle. But I can tell you, it is a lot harder to qualify to be a home owner in Seattle.’” Fewer than 40% of Seattle firefighters now live in the city, many of them because they cannot afford it, he said. In 1980, the median value of a house in Seattle was about $65,000. The entry-level firefighter qualified for a house valued at about $75,000, some 15% more than needed to buy the “average” house. In 2006, the median home value in the city was about $449,000. That year, the entry-level firefighter could qualify for a house valued at about $228,000, some 95% less than needed to buy the “average” Seattle house. Only two Seattle houses listed in the Multiple Listing Service for August of 2007 were priced at or below $250,000, he said. “The numbers — this escalating affordability gap in homeownership — track about the same for the police officer and the nurse. Good incomes, but much less purchasing power in the housing market than they had 25 years ago.” (www.seattletimes.com)
Seattle Times (11/11/07); Charles Royer
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Contractors Surface as Housing Market Slows
The Home Improvement Research Institute — an organization backed by manufacturers, retailers and wholesalers — projects that total home improvement product sales will decline this year by 1.3%. The reason is simple, said Gopal Ahluwalia, staff vice president for research at NAHB. “When prices are declining, the home owners don’t want to spend a whole lot of money on their homes,” Ahluwalia said. “When prices are rising, they tend to take care of their investment.” With home prices falling in many parts of the country, people who bought in recent years won’t be able to take out home-equity lines of credit, which many home owners use for renovations. “If you try to take out a home-equity line of credit, they’re going to be more skeptical about what your home is worth,” said Kermit Baker, director of the Remodeling Futures Program at Harvard University’s Joint Center for Housing Studies. There are no data yet on whether the remodeling slowdown will translate into lower prices for consumers. But Ahluwalia predicts that home owners will start getting better deals, even though the cost of construction materials has remained high. “By how much, we don’t know,” he said. “It’s an issue of economics and demand. There will be some impact on prices, the same thing that is happening with the new-housing market.” (www.seattletimes.com)
Seattle Times (10/28/07); Nancy Trejos, Washington Post
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Home Green Home
People planning to build a green home or embark on eco-friendly remodeling should keep five essential things in mind, according to Sara Lamia, author of “Housebirth: Your Guide to Buying an Energy-Efficient, Healthy New Home That Pays You Back.” “Aim for a tight thermal envelop,” she advised. “Getting the outside tight so there is no leakage of conditioned air. Thinking solar doesn’t just involve solar panels. Pay attention to where the sun streams into your house. Controlling the amount of light coming in can drastically affect your heating or cooling bills. Consider your home’s circulatory system. Evaluate the heating, ventilating and air-conditioning systems and make sure they are running at peak efficiency. Factor in fluids. If it’s time to upgrade your washing machine, consider water-saving and energy-efficient front loaders. For the yard, think about sprinkler systems that automatically respond to weather conditions. Power-up. Always consider Energy Star appliances, compact fluorescent light bulbs and flooring and paints with low-volatility organic compounds.” (www.newsweek.com)
Newsweek (11/5/07); Ashley R. Harris
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Smoke-Filled Environment Raises Ire Among Renters
This year, two California cities passed laws restricting smoking inside multi-unit residential buildings. In the last 14 months, two large residential real estate companies with apartment complexes in several states banned smoking inside units. Thousands of smaller apartment complexes across the country have taken similar steps, said Jim Bergman, founder of the Smoke-Free Environments Law Project, which is based in Michigan. And about 60 public housing authorities across the country have smoke-free policies, compared with less than 10 three years ago, Bergman said. Edward Sweda Jr., senior lawyer at the Tobacco Control Resource Center of the Northeastern University School of Law in Boston, said he has studied the legal issues of secondhand smoke for 28 years and knows of no law in the U.S. prohibiting residential property owners from banning smoking. At least 27 lawsuits have been filed since 1991 over smoking in multiunit housing, and judges have often sided with the non-smoker, Sweda said. (www.chicagotribune.com)
Chicago Tribune (11/11/07); Staci Semrad, New York Times News Service
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