A regional housing analyst who studies the Omaha, Neb., market is warning local builders and bankers that: “We’re going to run out of lots.” Dan Whitney of Olathe, Kan.-based Landmarketing Inc. admits that lenders might look at the metro area’s 12,225 developed yet unoccupied lots and wince at the thought of financing more. But he expects “pent-up demand” to be unleashed over the next five years and noted that it takes considerable time to finance and prepare land. “It’s the 800-pound gorilla in the room,” Whitney told a group of bankers, builders and Realtors, referring to today’s inventory. “On paper, it looks like a lot of years’ supply. But once you break it down to (desirable) lots in good areas…that supply dwindles pretty fast.” Whitney’s call to get more plots in the pipeline is based on his forecast that 2012 will reverse the slide in new-home construction. According to Whitney’s canvass, 12,255 lots currently are platted and ready for home construction in the Douglas, Sarpy and Pottawattamie counties area. Perhaps 25% are in not-so-desirable spots. If more lots are not prepared, he estimates that population growth and other factors could lead to an unmet need over the next five years of 4,300 in the three counties. (www.omaha.com)
Omaha World-Herald (1/25/12); Cindy Gonzalez

When first-time home buyers begin looking for new digs, they often have one guideline firmly in mind: think small. “First-time home buyers, because they have not been through the home buying process before, have less confidence that they are making the right decision even in spite of low interest rates and affordable prices,” says Stephen Melman, NAHB’s director of economic services. “While first-time buyers are often looking for the same things as repeat buyers,” he said, “they are more likely to compromise on space and upgrades.” A survey by the National Association of Realtors shows that 51% of first-time buyers said that finding the right property was the hardest part of the buying experience. A 2011 NAHB study about what homes will look like in 2015 showed that builders anticipate building smaller homes with more “green” features, both of which match with first-time buyer preferences. “The top things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom and a laundry room,” says Melman. “First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet. They are less likely to want a formal dining room and would rather have a dining area that uses less space.” (www.foxbusiness.com)
Fox Business (1/26/12)

By one recent estimate, the nation has about 2 million fewer households than under more normal economic conditions. Some of these potential buyers hesitate to take the risk of buying, even though their jobs and credit history may qualify them for mortgages. While near-record numbers of houses all over the country are empty, the sidelines are crowded with this huge “shadow demand.” A downpayment protection plan could help activate that demand for houses, according to James A. Wilcox, an economist and professor of business in the Haas School of Business at the University of California. Under the plan, home buyers could purchase protection from the government for a one-time fee, say 1% of the house purchase price, or $2,000 on a house selling for $200,000. The fee could vary with the risk of house price declines in each area. The plan would be open to all buyers. At the end of three years, the government would automatically mail checks to protected home owners if average house prices in their area were lower than when they purchased their homes. (No decline, no check — just like auto insurance.) (www.nytimes.com)
New York Times (1/25/12); James A. Wilcox

In these economically stressed times, when home prices haven’t appreciated much, the kitchen remodel has taken on a more streamlined approach to reflect the era. Top kitchen designers in the Washington, D.C., area recommend home owners consider this trend when planning improvements to get the most return on their investments. Their expert advice starts with an efficient floor plan for the kitchen. “If the layout doesn’t work, it doesn’t matter how much you spend on appliances and cabinets,” says kitchen designer Nadia Subaran of Aidan Design in Bethesda, Md. As the economy has shrunk, so has the size of a kitchen renovation, according to several kitchen designers. “People are realizing that they don’t need a huge kitchen for it to be efficient and comfortable,” says Bethesda kitchen specialist Jennifer Gilmer. Just a few years ago, she was creating big spaces filled with two of everything — sinks, ovens, refrigerators and dishwashers — and tons of cabinets. “That is considered wasteful by the young generation,” notes Gilmer. “Now people are doing simpler renovations within the existing space rather than adding on. Even without expanding, the kitchen can become more spacious with the right moves. “You can increase square footage and functionality by incorporating smaller spaces around the kitchen such as a closet, butler pantry or bathroom,” says Gaithersburg, Md., kitchen designer Davida Rodriguez. “Taking down walls between a breakfast room and kitchen gives that great room effect without having to bust out.” (www.washingtonpost.com)
Washington Post (1/25/12); Deborah K. Dietsch

Across neighborhoods long fortified against their own gritty reputations, steel and iron window guards, those often unsightly symbols of the bad old days, have slowly been receding from New York City. Once a reliable visual marker of neighborhood borders — no guards, some surmised, implied there was no need for guards — many bars have been casualties of an aesthetics-driven calculation, as families brush aside what they view as outdated home safety concerns. To be sure, window bars remain a presence along the ground floors of many apartment buildings and single-family homes throughout the city. Paul Gunther, president of the Institute of Classical Architecture and Art, said the practice of protective window guards dated at least to the Roman Empire. When he moved to New York in 1978, Gunther said, he bought an accordion-style window gate for his home on West 80th Street. “My first purchase, before even a mattress, was these hideous window gates,” he said. “But boy, did they make me happy.” During the crime-ridden 1970s, the police offered a free service: Officers would travel to homes in the five boroughs, on request, and provide tips on how to improve security. Window bars were among the suggestions. (www.nytimes.com)
New York Times (12/12/11); Matt Flegenheimer

The new Consumer Financial Protection Bureau is reviewing ways to bring more clarity and better disclosure to the home buying process — including appraisal charges. Although banks and mortgage lenders maintain that there is no need for additional disclosure, appraisers, builders, realty brokers and others say the costs of appraisals to consumers have increased during the past two years, while the quality and accuracy of the work have declined. In a random sample of 3,600 of its members last year, the National Association of Realtors found that 70% reported that consumers were being charged higher appraisal fees — sometimes an additional $100 or more — than was the typical charge previously. At the same time, NAR members who are appraisers reported sharp reductions in their compensation: cuts of 40%-50% per assignment. Many of the Realtors polled said they saw significant increases in the number of appraisers who were unfamiliar with local market conditions because they were from another geographic area. The same poll also found a growing incidence of sales transactions being derailed by appraisals that came in below the contract price agreed upon between the seller and the buyer. (www.washingtonpost.com)
Washington Post (1/27/12); Kenneth R. Harney