Housing Market Not So Bad in Right Places
New developments in scattered spots in the Pennsylvania suburbs prove that location is what always sells homes even in a tough real estate market. Individual builders may be negotiating slightly different paths through the current housing malaise by offering, for example, lifestyle communities with low-maintenance and amenities such as a pool, a clubhouse and retail. Yet location is still the secret to success. The traditional neighborhood development of Woodmont is considered a “strong performer,” said Wayne Norris, regional sales manager of Hanley Wood Market Intelligence, which tracks new-home sales. Since 2005, 85 of Woodmont’s 120 homes have sold, said Jason Duckworth, vice president of Arcadia Land Co. of Wayne, the community’s developer. “I’d like to take credit for success, but it was the location,” said Duckworth, whose company contracted with four builders — Pulte, Gigliotti, Masterpiece and NV Homes — to construct the houses on 6,000-square-foot lots. The homes range in price from $500,000 to $900,000. Schools in the Lower Moreland district are a huge draw, he said, as is the easy commute to jobs in eastern Montgomery County and Philadelphia. Many builders have adjusted to the economy’s current conditions “by bringing product to market that meet the shift in demand,” Norris said. Some new developments, including Woodmont, offer small houses with many upgrades that are designed to be attractive to first-time buyers, he said. The trend to smaller houses appears to be a national one, and they are generally selling better, said Bernard Markstein, NAHB’s senior economist. (www.phillynews.com)
Philadelphia Inquirer (7/8/08); Alan J. Heavens
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For Many Buyers, Common Space Is the New Backyard
Having mowed and raked their parents’ lawns when they were kids, Jennifer Lister and her husband, Eric Masters, bought a townhouse in 2006 without a lawn as a place where they could raise their children, now ages one and four. “We have a playground and an open field a half-block away,” said Lister. “Why take care of a yard when we can have this space right here?” Thanks to millions of home buyers who echo Lister’s sentiment, the Great American Yard could go the way of the wooden toboggan slide and the Sunday drive. While moving to single-family houses in the suburbs, where big yards abound, was automatic for millions of baby boomers when they married and had kids, many of their children, including Lister and Masters, have no such intention. “We’d rather be in the city, where we can walk to everything,” said Lister. Lot sizes for new single-family houses shrank from 1976 to 2006, according to NAHB. During those decades, the percentage of houses on lots less than 7,000 square feet (about one-sixth of an acre) grew to 35% from 18%. Those on 11,000-square-foot lots (one-quarter of an acre) dwindled from 41% to 32%. “It’s a combination of things,” said NAHB economist Steve Melman. “Baby boomers want less yard and no maintenance. The 20-somethings want proximity to entertainment and jobs instead of suburban houses with big yards. The last thing they want to do is mow. The middle group between, with kids, wants some yard but doesn’t have all weekend to ride a riding mower. They have soccer matches to get to.” (www.chicagotribune.com)
Chicago Tribune (7/11/08); Leslie Mann
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Sleepover Showings
In most markets, home buyers have the upper hand these days, which often means they have greater negotiating power when it comes to price or the ability to squeeze out extra perks from sellers ready to make a deal. But on occasion, they’ll ask a seller for even more to get to know the home better and determine if they’re ready to commit. The sleepover is not something being agreed to by droves of sellers, but it is a new tactic that some are considering, said Pat Skiffington, of Keller Williams Classic Realty in Orlando. He’s arranging for a prospective buyer to stay overnight in a downtown Orlando condo. “Buyers are being much more selective and there’s much more to choose from,” he said. This is one way sellers can make their home stand out. He wouldn’t recommend it for every home, however. The Orlando condo is a good candidate because the prospective buyers don’t live in the area, and experiencing what the downtown is like at night might sway them to make an offer, Skiffington said. Any seller who attempts this also should consider that while letting someone stay in your home can punctuate the positives, “it can also punctuate the negatives,” he said. Structuring a short-term contract to give the home a test-drive probably wouldn’t be that difficult to do, said Neil Garfinkel, a real estate attorney and partner with the New York-based firm of Abrams Garfinkel Margolis Bergson. As long as home owners have sufficient coverage under their home insurance policies, there shouldn’t be an issue, he added. “My first phone call would be to my insurance company,” he said. “The second would be to my attorney, who could help structure the transaction.” (www.marketwatch.com)
MarketWatch (7/10/08); Amy Hoak
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American Dream Goes Global; More Immigrants Buying Land in Native Countries
A growing contingent of immigrants are gobbling up real estate in their native countries, discouraged by high housing prices and foreclosures in the U.S. and enticed by the possibility of returning home to a better life than the one they left behind. Developers from countries such as El Salvador, the Dominican Republic, Mexico and Peru are increasingly courting immigrants at housing fairs across the U.S. Thousands of immigrants are buying homes in their native countries every year, and more private lenders and some governments are offering financing to sweeten the deal. Buying houses has always been part of the immigrant experience in the U.S. An estimated 5% of immigrants — tens of thousands of people nationwide — invest every year in some type of house project back home, according to a 2005 survey of eight Latin American countries by Manuel Orozco, a senior associate at the Inter-American Dialogue in Washington. But Orozco said immigrants face barriers to buying homes. Often, they cannot qualify for mortgages because they live in the U.S., so they send money to relatives who oversee construction of a home. Even when immigrants qualify for loans, he said, interest rates are often prohibitively high. In recent years, though, more real-estate developers, private lenders and governments are making it easier for immigrants to buy homes directly, according to government officials and the Inter-American Development Bank in Washington. The Dominican Republic government is allowing immigrants to apply for up to $10,000 in aid for downpayments, for example. (www.boston.com)
Boston Globe (7/7/08); Maria Sacchetti
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The Gamble of a Pawn Shop
Standing by row after row of construction and carpentry tools, David Jones, chairman of the Pawn USA chain, said what had been a steady flow has in recent months turned into a torrent of folks looking to unload drills, nail guns, circular saws, compressors and other tools. “When you start to see the professional tools, that tells you where the economy is at,” said Jones, a former mayor of Wilmington, N.C. “I bet you we’re a better barometer of the economy than all those economists with their Ph.D.s.” Today, a lot of people are looking to divest themselves of their construction and landscaping tools as residential construction falls to what NAHB describes as its lowest level since March 1991. Jones said that could be because people are shuttering side businesses as the market dries up or leaving the area or country to seek greener economic pastures. The flood of tools in the market has prompted Jim Lamonda to become very choosy about what equipment he’ll take. “They better be high-end and in good condition or I’m not interested,” said the owner of Atlantic Jewelry and Pawn. Lamonda has been open for only six months, and he only half jokingly said he picked the right time to get into the business. There’s no doubt people are hurting, he said. During good times, people don’t have the time or the inclination to come in and hunt for deals or sell their excess jewelry for some extra pocket cash. But when they’re struggling, every little bit of cash helps. (www.wral.com)
Star News of Wilmington (7/9/08); Gareth McGrath, Associated Press
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Mortgage-and-Credit Crisis Results in Thousands of Job Losses Statewide
Thousands of workers throughout Florida, including more than a few thousand in the central part of the state, have lost their jobs amid the mortgage debacle that has roiled the global financial markets since last summer. Although the construction industry has borne the brunt of the housing slowdown in Florida, shedding tens of thousands of jobs during the past year alone, positions in the financial-services sector have increasingly disappeared, too, from mortgage brokers and Realtors® to title agents and bankers. Florida’s financial sector had 6,100 fewer jobs in May than it did a year earlier, a 1.12% decline, according to the latest data from Florida’s Agency for Workforce Innovation. That’s the biggest employment hit in decades for a business known historically in Florida as a job-creation engine. (www.orlandosentinel.com)
Orlando Sentinel (7/14/08); Richard Burnett
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