Archives for June 2012

More Americans Expect Home Prices to Rise

parkland-real-estate-valuesMore Americans are optimistic that home prices will inch up over the next year, with expectations that prices will rise at least 1.4 percent in that timeframe. That marks the highest amount ever recorded in Fannie Mae’s monthly National Housing Survey.

Thirty-four percent — also the highest ever recorded — of the 1,000 respondents in the May housing survey say they expect to see a boost in home prices in the next year. Forty-one percent say they think mortgage rates also will rise over the next year.

“Both indicators suggest the potential that consumers may consider moving off the sidelines to purchase a home,” according to the survey. 

Survey respondents also say they expect rental prices to continue to edge up over next year, projecting a 4.1 percent increase in that period.

Still, a slowdown in the pace of new jobs and income growth is creating a plateau in consumer sentiment that might delay a full recovery in the housing market, according to Fannie Mae’s survey. Fifteen percent of those surveyed reported that their household income is significantly lower than it was 12 months ago, which marks a record low in the annual survey.

"Our May consumer data show that Americans are taking a ‘wait and see’ approach about buying or selling a home,” says Doug Duncan, Fannie Mae’s chief economist. “This is not surprising given their assessment that their income during the past 12 months and their personal financial expectation for the next 12 have leveled off. … Current jobs data are reminiscent of the spring slowdown that continued into the summer months during the last two years. If this pattern continues, we do not expect to see any significant upturn in consumer sentiment during the summer and a meaningful housing recovery likely will be delayed once again."

Source: Fannie Mae and “Americans Expect 1.4% Increase in Home Prices: Fannie Mae,” HousingWire

Seattle economy ranked No. 3 among U.S. metro areas

200-muscle-moneyThe Seattle-Tacoma-Bellevue metropolitan area economy ranks as third strongest in the U.S., according to ratings by Policom Corp., an independent research firm.

Washington DC, anchored by an expanding federal government, retained its 2011 position atop the list, followed by Des Moines, Iowa, which is buoyed by a growing finance and insurance sector.

Policom creates the rankings using 23 different economic factors over a twenty year period. For the current rankings data covered the period 1992-2010. The highest ranked areas have had rapid, consistent growth in both size and quality for an extended period of time. The lowest ranked areas have been in volatile decline for an extended period of time.

Policom specializes in analyzing local and state economies. It annually ranks the 366 Metropolitan Statistical Areas and 576 Micropolitan Statistical Areas (smaller economies that do not have city with a population greater than 50,000 people).

Rounding out the top 10 list of metropolitan areas with the strongest economies are Nashville-Davidson-Murfreesboro-Franklin, Tenn., Austin-Round Rock-San Marcos, Tex., Salt Lake City, Madison, Wis., Kansas City, Mo.-Kan., Sioux Falls, SD, San Antonio-New Braunfels, Tex.

In addition to Seattle, ten metro areas in Washington were ranked, including:

Olympia (No. 11)
Kennewick-Pasco, Richland (13)
Portland-Vancouver-Hillsboro (51)
Bremerton-Silverdale (61)
Bellingham (65)
Mount Vernon-Anacortes (90)
Spokane (109)
Yakima (227)
Wenatchee-E. Wenatchee (259)
Longview (294)

Concord, the capital of New Hampshire, topped the list of 576 Micropolitan areas. Among micropolitan areas within Washington, Ellensburg ranked highest at No. 37. Other areas on the list and their rankings included:

Walla Walla (54)
Moses Lake (100)
Oak Harbor (125)
Shelton (128)
Port Angeles (148)
Pullman (266))
Centralia (294)
Aberdeen (318)

From its research, Policom determines if an area is growing or declining, what is causing this to happen, and offers ideas and solutions to communities to improve the situation.

"The rankings do not reflect the latest ‘hotspot’ or boom town, but the areas which have the best economic foundation," explained William H. Fruth, president of Policom. "While most communities have slowed or declined during this recession, the strongest areas have been able to weather the storm," he noted.

Obama’s May Housing Scorecard: Market Stabilizing

scorecardThe latest Housing Scorecard from the Obama administration showed real estate stabilizing in every region of the country, but it still has a long way to go in the road toward full recovery.

Existing-home sales increased 2.4 percent in April, according to the Obama administration’s Housing Scorecard for May. Sales also continued to outpace inventory levels. The inventory of homes for sale decreased to 5.1 month supply in April from 5.2 months in March. Also, according to the report, the inventory of newly constructed homes rose for the first time since April 2007.

HUD Acting Assistant Secretary Erika Poethig also notes that more borrowers are taking advantage of the government’s refinance programs to lower their mortgage payments, and adds foreclosure starts are declining.

“But with so many households still struggling to make ends meet it’s clear that we have more work ahead," Poethig says.

Underwater mortgages continue to threaten the market recovery, the report notes. The number of borrowers who owe more than their home’s current value rose to more than 11 million. Seriously delinquent subprime mortgages also are on the rise.

To read the full report, visit www.hud.gov/scorecard.

Source: U.S. Department of the Treasury

Single-Family Rental Boom to Take Toll on Neighborhoods?

home-for-rentMany former home owners displaced by foreclosure are being left with no other option but to rent. They’re increasingly turning to renting single-family homes, which is the fastest growing segment of the rental market from 2005 to 2010, according to Fannie Mae research.

Three million former home owners from the foreclosure crisis will likely rent single-family homes between 2010 and 2015, according to estimates by John Burns Real Estate Consulting.

"In the next five to 10 years, you’ll see tens of billions, if not hundreds of billions, of dollars of private equity" pouring into the single-family rental business, Justin Chang, principal of investment firm Colony Capital, told USA Today.

But some home owners are concerned about what the surge in renters will bring to their neighborhoods. Some home owners say that renters don’t tend to take care of the yards or home maintenance as well as home owners, they have more parked cars lining the streets, and they are more disconnected from their neighborhoods. Some home owners fear that more rentals coming into their neighborhoods will hurt home values too.

They may have reason for their concern: A study completed 10 years ago showed that a 10 percent increase in a neighborhood’s home ownership rate led to about a 3.6 percent increase to home values, according to a study by Edward Coulson, a Penn State University economist. Coulson’s preliminary data on newer research suggests that an increase in rentals to a neighborhood may slightly decrease home values. 

Some cities have taken steps to limit the number of the rentals. West St. Paul, Minn., and some other Minnesota communities, for example, have adopted laws to limit single-family home rentals to 10 percent of homes on a neighborhood block.

However, some critics argue that investor-owned rentals could help give some neighborhoods a much-needed lift. Some renters may do a better job at upkeeping homes than a distressed home owner, let alone a home that just sits vacant, they argue.

Source: “Home Rentals: The New American Dream?” USA Today

Joe Herrin designs a glass cabin on Orcas Island

There are no interior walls except for the utility room on one end of the house and the guest rooms on the other.

By Rebecca Teagarden

WHAT YOU don’t see is what you get from Rysia and John’s home on the north shore of Orcas Island.

Rysia, an interior designer, and her husband, John, an engineer, fell hard for Orcas in 1981. Back when it was still one of those tune-in-turn-on-drop-out kind of islands. They bought their piece of it, 3 ½ acres, for around $300,000 and spent summers there, at water’s edge along the Georgia Strait in a small, modular home that came with.

Rysia, who has designed interiors for major corporate clients, spent the next two dozen years imagining her ideal island house; few walls, high ceilings, low-impact, energy-efficient, easy to maintain. And that is what you see here, 2,070 square feet of glass and Italian marble that, as a package, appears hardly there at all and glows like a home in one of heaven’s better neighborhoods.

"The Philip Johnson Glass House. We had photos of that house on the wall," says architect Joe Herrin of the inspiration. "You sit on the toilet and you’re looking out."

Simple. But simple isn’t easy. And this, most certainly, was not. For more than 1,000 years, the Lummi Indians used the land as a winter camp. There were artifacts (stones and shells made into tools), and the discovery barred any turning up of the earth. Also, the property sits in a flood zone. Any structure built there would need to be raised, yet (returning to Problem A) without digging.

But here the home sits. Carried from dream into reality by Herrin, a former co-worker, of Heliotrope Architects in Seattle and built by Orcas contractor Dave Shore of Dave Shore Construction. A mat-slab foundation (the concrete poured over the grass) with walls on the edges holds the house in a hover at 3 ½ feet. Glass walls dominate the long sides of the home that is just 28 feet wide: trees and meadow on one; driftwoody beach and, off in the distance, Canada on the other.

An ipe deck runs the length of the house on both sides. There are no interior walls except for the utility room on one end of the house and the guest rooms on the other. Living room, dining, kitchen open. Only opaque glass separating the kitchen and the master bedroom, sandwiching a pantry, walk-in closet and bathroom in between.

The green roof planted in red poppies reduces rainwater runoff. The rest is collected for irrigation. Rooftop solar-thermal collectors provide hot water both for drinking and for hydronic heating. Photovoltaic panels supplement electricity needs.

The home is racking up awards. In December the North Beach residence received a Best of the Year award from Interior Design Magazine. Also last year, American Institute of Architects chose it for a National Housing Award, sort of the Oscars of residential architecture. And in 2009 it received a Merit Award for Washington Architecture from Seattle AIA.

"Rysia and John are friends of mine, and I love it that they love it," Herrin says. "That’s the most important thing to me."

(via) Rebecca Teagarden writes about design and architecture for Pacific NW. Benjamin Benschneider is a magazine staff photographer.

The tempo of our market continues to speed up

old-fashion-metronomeSales of homes in less than 30 days (contracts received), is a good indication of properties that are well presented, well priced and well marketed.

Here is the percentage of homes that sold in the first 30 days for the  greater Seattle area:

less than 30 days

  • January 25.24%
  • February 33.48%
  • March 37.18%
  • April 41.83%

Here is the percentage of homes that sold in the first 30 days for the Eastside:

30 days eastside

  • January30.1%
  • February41.51%
  • March42.64%
  • April48.25%

Literary Literalism: Bold Bookcase Shaped Like Book Pages

Some books form subtle plots through metaphor and allegory … but if this storage system were a story, it would be blunt and obvious, for better or worse.

The Pagina bookcase from Cassina comes in blue but also more-obvious white, looking very much like pages from a book, particularly when you put the pair of symmetrical sides next to one another.

Though it appears inflexible and domineering, its individual shelves can actually be moved, and the varying depths (shaped by the curving of the front surface) actually allow for a practical arrangement of items based on size. Either way, if your books alone were not enough to show your love of literature, this surely tells the world where your heart lies.

Music Review: Dave Grusin “The Firm” Soundtrack

the firmWhile flipping through the channels a couple of weeks ago, I landed on the 1993 film “The Firm”. Dave Grusin’s score was composed for John Grisham’s legal thriller starring Tom Cruise. Considering all the scores that attempt to copy John Williams, this score, consisting of jazz acoustic piano pieces, is a surprisingly low-key, yet effective approach. When it came out, my assistant Cathy (a fine piano player) was so enamored with the soundtrack. I have to admit, it took me a little longer to go out and purchase the CD.

Grusin uses the piano as a melodic solo instrument, while at other times, he pounds away, exploiting its percussive ability. What was most astonishing to me are the grooves he is able to create with just two hands. That being said, on many selections, Grusin, accompanies himself – in other words, there are at least three, and to my ears, often four hands playing.

“Memphis Stomp” is a quasi-boogie-woogie groove that when you close your eyes you can picture yourself strolling down the streets of Memphis. “Ray’s Blues” is a slow pensive blues that I found very soothing. “The Plan” defies categorization. The accompaniment is as interesting as the melodic components. There are hints of a big band with snippets of jazz vocals, though played on an acoustic piano.

At times, the tunes reflect the mood of the scene so well. One such song is “Blues: The Death Of Love & Trust”. The heartache is evident in the melody and tempo. Even the timbre of the piano sounds introspective. “Mud Island Chase” is the only tune that has percussion added to the piano tracks. The mixed meter, along with the strumming of the piano strings, creates the angst and tension that the characters are feeling in the scene.

The CD is augmented with some pop and fusion songs by Jimmy Buffett, Lyle Lovett, and Nanci Griffith, to give a feel of the contemporary Southern locale.

Dave Grusin did an outstanding job of creating interest, color and musicality with a minimalist approach. Unlike some soundtracks, this disc stands on its own musically, worth multiple listenings. Since it is on the older side, purchasing this at a discount price should be pretty easy.

Seattle-Area Rentals By the Numbers

home-for-rentIn recent years, builders pulled back on apartment construction, unsure how much demand they’d see from young adults, relocation cases, and downsizing boomers. But that’s all slowly changing. As more jobs emerge in tech and other sectors, renters are filling the market. Low rental inventory means that asking rents are rising. Asking rents rising makes for rising cranes: A new wave of apartment construction is expected to add more than 20,000 units of housing to the region in the next two years in downtown, Belltown, the Eastside, and West Seattle.

Chart Source: Dupre and Scott Apartment Investment Research and Consulting

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