Tag Archives: homeowners

Celebrating property owners who hold on to their land even as development surrounds them

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The movie Up starts with a portrayal based on a true story: property owners continue to live in their home even as it becomes surrounded by new buildings. Their home is now isolated amidst change.

Here is a similar recent story from Australia:

https://www.facebook.com/7NEWSsydney/videos/790734838563206/

Their large five bedroom property with a sprawling 200 metre-long drive is located in The Ponds area in west Sydney, where hundreds of new homes have popped up in recent years…

The home looks bizarrely out-of-place wedged between identical chock-a-block newbuilds, where its 1.99 hectare garden could fit over 50 of the matching new homes inside.

However, when their neighbours upped and left – choosing to sell to the developers – the Zammits made a last hold out.

They refused to sell, despite being offered millions, and prevented the developers snatching up the last plot of land.

“The fact that most people sold out years and years ago, these guys have held on. All credit to them,” local agent Taylor Bredin told 7News…

In short, the land could be worth over £25million, especially after ten years of their private rebellion.

The valiant resident holds on to their land despite possible riches; all they have to do is move. Such a story fits the image of the sacrosanct property owner. A home is their castle. No one can tell them what to do. If they want to stay, they can stay. The government or private actors should not be able to move them.

At the same time, we believe growth is good. If even just a few property owners hold out, they can interrupt larger plans for new buildings and activity. Imagine an important highway project or mass transi line or new tall building that need several properties to make it better for others but those owners will not sell. Are there limits to whether a property owner can hold on?

In the Seattle story referenced by Up and in this Australian suburban story, developers could not force the issue but they could build right around them. Edith Macefield’s Seattle home was boxed in on three sides. The suburban property above is surrounded on all four sides by dense single-family homes. The property owner has stayed but the surrounding area has been radically transformed.

For now, the single-family home owner reigns supreme. That there are relatively few similar cases also tells us something. It is nice to hold on to a property but it is also nice to profit tremendously from selling it. Some may not like teardowns but the initial homeowner can make a lot of money. Housing and land is an investment. Few can hold out against the available money and resulting changes.

The most frequent homeowner regret about their home is not purchasing a bigger one

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A good number of Americans regret features of the homes they purchase:

More than half of all buyers have regrets about their purchase of a home, Trulia reports, and the No. 1 mistake buyers feel like they made is choosing the wrong size. Forty-two percent of those polled by the real estate site say that they picked a place to live that was either too large (9 percent) or too small (33 percent).

Almost the exact same number of renters, 41 percent, “wish they had bought instead.”

Twenty-six percent of buyers also wish they had done either less or more remodeling.

What might explain these regrets?

Buying a house is often the biggest purchase a person will ever make, so it’s natural that many experience some buyer’s remorse…

Home size has been a common gripe over the years, especially as housing gets more expensive and people have to settle for smaller spaces, said David Weidner, managing editor for Trulia’s housing economics research team.

Or are Americans so embedded within consumerism that they are always wishing for more? At the same time, expressing regrets about a major purchase doesn’t necessarily mean that people would have done it differently. If I like my home but wish the yard had more space, am I dissatisfied with owning my home? Not necessarily.

It is too bad we don’t get more information about how much bigger homeowners wish their home would be. Perhaps the average homeowner just wants another room to two to handle all their stuff as opposed to all Americans wishing to live in giant McMansions.

 

How much of their home do residents use?

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An op-ed opposing Los Angeles mansionization suggests owners of large homes don’t regularly use all that space:

In “Life at Home in the 21st Century,” UCLA researchers tracked 32 middle-class Angelenos, trying to measure and analyze how we live today. One family in particular they followed intimately, tracking how they moved around the house during the mornings, evenings, and weekends — when they were all home. The results were amazing: the family huddled around the kitchen and family room nearly all the time, leaving the living room, porch, and more than 50% of the rest of the first floor communal spaces almost entirely empty. The habit of gathering around the kitchen to eat, or huddling in front of the TV to watch, hasn’t changed much since the 1950s, but the average home size has — from 983 square feet in 1950 to more than 2,660 square feet today. Meanwhile, the average family size has shrunk and so has the average number of people living under one roof, from 3.3 in 1960 to 2.54 today.

See more about the book here. While the book appears to detail the heights of American consumerism (see this interview with one of the authors), it is interesting to consider how often rooms in a house are used. Are they really like office or store parking lots that tend to get used during certain work hours each day and then sit empty for more than half the day? Bedrooms operate that way during sleeping hours while gathering spaces – kitchens and family rooms – attract users in the evenings. Those hobby or storage rooms that are popular now – ranging from the man cave to a large closets – rarely see human activity. Could homes be made significantly smaller if the uses were combined or square footage was changed to reflect usage patterns? Or, should homes be built in a hub and spoke model around these key social spaces? On the other hand, American homes seem to privilege maintaining private spaces even if they aren’t used very much. The formal living room may be out but some homeowners seem to want private retreats (at least on TV, particularly in their bathrooms).

All of this gets back to you what homes are for in the first place. From decades ago to today, American homes often represent an escape from the outside world. A place to escape to with your family. A space where outsiders and the government cannot tread. Making such homes more communal is an interesting challenge when the homeowners need to be protected from forces outside the home.

The rise of the zombie mortgage titles

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Here is what happens if a bank decides not to go through with a foreclosure and the owner is stuck with a “zombie title“:

Since 2006, 10 million homes have fallen into foreclosure, according to RealtyTrac, a number that in earlier, more stable times would have taken nearly two decades to reach. Of those foreclosures, more than 2 million have never come out. Some may be occupied by owners who have been living gratis. Others have been caught up in what is now known as the robo-signing scandal, when banks spun out reams of fraudulent documents to foreclose quickly on as many homeowners as they could.

And then there are cases like the Kellers, in which homeowners moved out after receiving notice of a foreclosure sale, thinking they were leaving the house in bank hands. No national databases track zombie titles. But dozens of housing court judges, code enforcement officials, lawyers and other professionals involved in foreclosures across the country tell Reuters that these titles number in the many thousands, and that the problem is worsening…

Banks used to almost always follow through with foreclosures, either repossessing a house outright – known in industry parlance as REO, for real estate owned – or putting it up for auction at a sheriff’s sale. The bank sent a letter notifying the homeowner of an impending foreclosure sale, the homeowner moved out, the house was sold, and the bank applied the proceeds toward the unpaid portion of the original mortgage.

That has changed since the housing crash. Financial institutions have realized that following through on sales of decaying houses in markets swamped with foreclosures may not yield anything close to what is owed on them.

It would be fascinating to know exactly how many of these homes there are – and what the best solution to this issue might be. I remember the stories of homeowners who thought it was easier to simply walk away from their homes but it sounds like the banks have caught on and realized they might not make much from that situation either. It sounds like we need some guidelines to determine who is responsible for the home if no one, the homeowner, the lender, and perhaps even the community, doesn’t want it.

There goes the neighborhood, vacant suburban lot full of dandelions edition

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As I was walking near campus, I spotted a yard that may just be in many suburbanites’ nightmares: a vacant corner lot full of dandelions.

DandelionLawn

Granted, these dandelions might be temporarily in bloom but this is a potential disaster for many neighboring yards. Even worse, this yard sits at a corner on full display. Interestingly, the lot also contains a “for sale” sign. Does the sight of dandelions discourage anyone from purchasing it? Would it better to have a barren yard than this spectacle?

It can be hard and laborious to fight off the dandelion scourge if others around you don’t keep up. The picture isn’t quite wide enough to show it but there is a very clear line where the yard to the right begins because of the absence of dandelions. How long can that pristine yard to the right hold out? My neighborhood has some similar issues; when dandelions are in full bloom, on windy days the air can be full of white seeds blowing around. I’ve had to act as a dandelion vigilante, digging out the root at first sight of the yellow bloom. Until this point, I’ve been able to keep things under control without herbicide but that would be much more difficult if I lived next to this lot. Is there a proper etiquette or protocol to follow in order to get a nearby homeowner to tackle the dandelions in their own lawn?

And thus continues the battle between suburbanite and nature, man versus weed. When homeowners are not vigilant, all lawns can suffer.

(I think this issue is related to one I raised a few weeks ago: it may not be a pretty sight if everyone lets their dog use the common areas in a neighborhood for a restroom.)

The rise of granite countertops

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I’ve written about this before but more people are also interested in this topic: what is behind the rise in popularity of granite countertops?

“What’s interesting is how granite has quickly become the one and only material, across the country and across all price points,” says Ron Cathell, a real estate agent in Northern Virginia. It used to be a high-end thing, back in the 1990s when these countertops began making appearances. It was aspirational. “Then, 12 years ago, the first sort of moderately priced homes started using it. Now, every home has to have granite if you want to sell it. Not just sell it, but rent it. It’s become such a thing. It’s almost — ” he searches for the right metaphor. “It’s almost like trying to sell a house without a toilet.”

As the price has gone down, the popularity has gone up; just look at the graph provided by StoneUpdate.com, a Web site dedicated to the natural stone industry. In 2000, 895,000 metric tons of granite slabs were imported to the United States. In 2011, that number was 1.43 million — and that’s down from a high of 2.64 million a few years ago. The recession slowed granite sales — even cheap granite, which can be bought for as low as about $30 a square foot. Less cheap can go for $80, or however much you’re willing to spend, really. The backsplash is the limit.

“Let’s get deep, let’s get psychological,” says Anthony Carino. Carino is the co-host of “Kitchen Cousins,” a renovation show on HGTV, the network that taught the world about recessed lighting and radiant heating, that democratized the stainless steel appliance so it could be enjoyed by New Yorkers and North Dakotans alike. HGTV is the land that viewers visit when they are trying to cultivate a personal design aesthetic by spying on what everyone else is doing. “People wanting granite countertops is people wanting to sound like they know what they’re talking about,” Carino says. “It’s like listening to two guys talk about hot-rod cars.”

I would argue that this is not psychological – it is sociological. Granite countertops are in for three big reasons:

1. It signals something about its owners. Perhaps it is that they have the money (a marker of social class). Perhaps it is because they have the right taste (though whether it is about aesthetics or being functional would be interesting to look at). Perhaps it is because they are smart enough to get behind the latest trend (#2 on this list).

2. It is what is popular now, thanks to HGTV and other outlets. People want what is popular, partly because they don’t want to be left behind (like having Harvest Gold appliances) and partly because of #3.

3. It helps a home sell. Add stainless steel appliances and decent cabinets and you have a kitchen that is ready to help sell the house.

People internalize these important factors and then make a decision whether to purchase granite countertops or not.

A few other things intrigue me:

1. Are granite countertops “green” or “sustainable”? Does it matter?

2. I’ve seen a few references here and there to a backlash against people who buy this. One referred to purchasers as the “granite and stainless set.” Will this grow into a bigger movement and/or how long will the granite countertop popularity last?

3. Is part of the appeal the natural nature of granite? Although one could argue that it is strange to bring a big slab of rock into your gleaming kitchen…it makes for an odd mix of modern machines and prehistoric rock.

4. How do people sell other countertop surfaces these days if granite is so popular? Besides price, what is the sales pitch for something else?

Also, Megan McArdle recent wondered why people purchase stainless steel appliances.

h/t Instapundit

Balancing libertarian and humanitarian instincts when using the word “NIMBY”

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Megan McArdle discusses how the word NIMBY is a prejorative term that tends to be used in instances when the user doesn’t approve of particular uses (opposed to uses that they would approve):

I think this is a little bit too cute.  I read DePillis pretty regularly, and I don’t usually see her calling out, say, people opposing a local Wal-Mart as “NIMBYs”; they’re “opposition groups”.  The term NIMBY seems to be reserved for people who oppose locating things in their back yards that DePillis herself thinks are laudable.  Small wonder that when she uses the word, people take it as a perjorative.

Nonetheless, she has a point: many people oppose having necessary but potentially disruptive things located near them, even if you think those things are a good idea; if you do, you should own it, not make up ridiculously implausible stories about how those inner-city kids wouldn’t really enjoy a halfway house in a nice, suburban neighborhood; they’d be much happier in a crack-infested ghetto like the one where they came from.  Don’t you know you shouldn’t remove creatures from their natural habitat?
 
In the case of people in some DC neighborhoods, they may even be justified.  Anacostia–and my own neighborhood–house an unusually large number of social service organizations, because land has been cheap, and the communities have lacked the socioeconomic power to block new projects the way that, say, Dupont and Friendship Heights have.  I don’t know the statistics on Anacostia, but Eckington/Truxton Circle house thirteen social service groups, from women’s shelters to So Others Might Eat, a wonderful organization that serves thousands of meals to homeless people every day.  Frankly, I haven’t found them disruptive–and indeed, didn’t really know they were there until controversy erupted over a plan to build a fourteenth service facilities.  But the fact remains that a lot of the homeless people hang out in what passes for the area’s park space between meals, and more than a few spend the day drinking single-serving beers from the area’s many liquor stores…
 
In this case, my libertarian instinct squares with my humanitarian instinct: at least in the case of private charities, I cannot, in good conscience, oppose letting them do whatever they want with the property they buy (within reasonable limits on things like toxic fumes and all-night jackhammer parties.)  But I don’t think it’s helpful to brand my neighbors who do as NIMBYs.  Oversaturation of neighborhoods with social services is a genuine problem for those neighborhoods.  We should treat it with at least as much respect as we give to those who don’t want to live near a big-box store.

McArdle seems to be suggesting that the use of the term NIMBY escalates a discussion about land use to an unhelpful level. As soon as the word is brought out, the terms of the discussion changes as the user implies that people are being selfish and those being called NIMBY then have to go on the defensive. Additionally, NIMBY is in the eyes of the beholder: what one person would see as desirable is an abomination to another.

The term McMansion, something I have spent a lot of time studying, is used in a similar manner. Just like NIMBY, the term evokes larger issues such as excessive consumption, sprawl, the disruption of a neighborhood, etc. McMansion and NIMBY are not simple descriptive terms that just refer to a big house or opposition to a particular land use. Both are politicized terms. NIMBY often refers to wealthier, white, more educated homeowners who want to protect their private utopias that many see as exclusionary and government subsidized.

Are there helpful alternatives to the term NIMBY?

The importance of property values to NIMBYism

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NIMBYism is cited as a common American issue as homeowners often fight hard to protect their pristine homes and neighborhoods. I was reminded of this by an article looking at seven neighbors that damage property values:

Here, the seven suprising neighbors that can reduce your home’s value:

Power Plants. The data is fairly clear on the impact of power plants on nearby home values — it usually hurts them. A study from the University of California at Berkeley shows that home values within two miles of a power plant can decrease between 4% and 7%.

Landfills. A study from the Pima County (Arizona) Assessor’s office shows that a subdivision located near a landfill (and all other residential factors being equal, like house size, school quality and residential incomes) loses 6% to 10% in value compared to a subdivision that isn’t located near a dump.

Robert A. Simons, an urban planning professor at Cleveland State University, says that if you live within two miles of a Superfund site (a landfill that the government designates as a hazardous waste site), your home’s value could decline by up to 15%.

Sex Offenders. Living in close proximity to a registered sex offender is one of the biggest downward drivers of home values. Researchers at Longwood University’s College of Business & Economics conclude that the closer you live to a sex offender, the more your home will depreciate. In the paper, Estimating the Effect of Crime Risk on Property Values and Time on Market: Evidence from Megan’s Law in Virginia, Longwood researchers say, “the presence of a registered sex offender living within one-tenth of a mile reduces home values by about 9%, and these same homes take as much as 10% longer to sell than homes not located near registered sex offenders.”

Delinquent Bill Payers. One surprising way that neighbors can bring down the value of surrounding homes, especially in town home or condo communities, is by not paying their maintenance fees or their mortgages. “Bad neighbors bring values down by not paying their maintenance fees, in some cases their mortgage payments, and not maintaining the home’s appearance,” says Pordes. “These homeowners usually do not care about real estate values.”

Foreclosed Homes. Perhaps the biggest single factor that drives nearby home values down is a foreclosure. A recent study by the Massachusetts Institute of Technology concludes that a neighbor’s foreclosed home can slash the value of homes within 250 feet of the foreclosed properties by an average of 27%. Says Federal Reserve Governor Joseph Tracy recently in his economic outlook for 2011: “The growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market… Problems in housing markets can impact economic growth.”

Lackluster Landscaping. Studies show that lawn care has a big impact on surrounding home values. Virginia Tech University released a report stating that pristine landscaping can jack up the value of a home by 5% to 10%. But if the lawn looks like it just hosted the world rugby tournament, it can be a green thumb to the eye of local home prices.

Closed Schools. Sometimes, neighborhood problems can stem from local government action. For example, if a cash-strapped city or town closes a neighborhood school, that can easily steer home values south. The National Association of Realtors says that 75% of home shoppers, the quality and availability of schools in the neighborhood is either “somewhat important” or “very important.”

As the article notes, what an individual homeowner can do about these situations might be limited. Perhaps the best way to avoid this is simply to do one’s homework before moving into a neighborhood to assess what has happened or might happen in the future. This could involve checking community websites, reading local news, and talking with current residents. But, there are always trade-offs involved in this process. If someone desires a cheaper home, perhaps they might move into an area that has one of these conditions.

At the same time, there are plenty of land uses or neighbors that are not cited in the article where homeowners band together to protect their community. Here are a few recent situations in the Chicago region: a battle over affordable housing in Winnetka (with an update here), Naperville residents opposed to Show-Me’s and Evanston residents opposed to a Tilted Kilt restaurant, and a debate over lighting in Barrington Hills. Compared to a power plant or landfill, these uses seem much less obvious and yet are important concerns for residents of wealthier communities.

On the whole, this article illustrates that one of the primary goals of a homeowner is to protect and/or grow their property values. In order to do this, a homeowner may have to be in opposition to larger neighborhood or community goals. After all, power plants and landfills and sex offenders have to be somewhere. But, if you have the economic means in the United States, you generally move to nicer and nicer neighborhoods where these NIMBY concerns are likely reduced. It would be interesting to track how people’s neighborhood or suburban moves over the years progressively place them further and further away from such property value lowering uses.

Mortgage problems continue; 9.9% have missed at least one payment

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Some new data suggests the mortgage crisis is continuing and still affecting a large number of people:

One in 10 American households with a mortgage was at risk of foreclosure this summer as the government’s efforts to help have had little impact stemming the housing crisis.

About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said Thursday.

That number, which is adjusted for seasonal factors, was down slightly from a record-high of more than 10 percent as of April 30.

In a worrisome sign, the number of homeowners starting to have problems with their mortgages rose after trending downward last year. The number of homes in the foreclosure process fell slightly, the first drop in four years.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.

Even if this data were to improve soon, there would still be a long way to go to get back to anything resembling the housing markets of the 1990s or 2000s.