Tag Archives: real estate

Different features of homes through the decades

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The design of single-family homes has changed quite a bit through the decades. Here is an overview, featuring this description of what homes built 1980s have featured:

More than 80 percent of homes listed for sale today in Austin, Raleigh, Las Vegas, Phoenix, Houston, and Dallas were built since 1980. In fact, more than one third of the homes listed today in Austin, Raleigh, Houston, and Dallas were built after 2010: these markets had a relatively mild housing downturn during the crash and demand for new construction has remained strong. In contrast, few homes in Las Vegas or Phoenix  have been built since 2010, but more than a third of their listings were built in the boom-and-bust 2000s decade.

Which features are distinctly modern? Homes built in the 1980s offer cathedral ceiling skylights, sunken living rooms, and mirrored closets. The 1990s gave us palladium/palladian windows (a large arched window flanked by smaller rectangular windows), island cooktops, and pot shelves (no, silly, that’s a kitchen feature). Next came the decade of water and audio: infinity edge pools, snail showers, and pre-wired surround sound are often mentioned in listings from the 2000s. Finally, phrases emphasizing artisanship and nature popped in the 2010s, like hand-textured walls, handscraped hardwood floors, and natural light exposure.

Recently, too, homes have gotten bigger, especially since the 1990s: homes built in the current decade are 80 percent bigger than the typical 1940s home. On top of all that, “new” is hard to resist, especially compared with the wear-and-tear that older homes have. As a sales agent in a new Las Vegas development said to me during the boom, “Why buy a used house when you can buy a new house?”

All those extra square feet, island cooktops, and hand-textured walls come at a price. The median listing price of homes built in the 2010s is more than twice that of homes built in the 1900s, 1910s, and 1940s. That means buying a piece of history will set you back a lot less than a big, modern house will.

Sounds about right except for the missing stainless steel appliances and granite countertops. It would then be interesting to these features and design changes with how perceptions of homes have changed. Take the significant change in square footage from the 1950s to the roughly 2,500 square feet for average new homes today – do homeowners feel like this size larger size is right? Or, take the updated and fancier kitchens: more Americans are eating out and consuming processed foods yet the emphasis on having gleaming kitchens has increased.

This also is a reminder of the population shift to the Sunbelt in recent decades.

Replacing the “master” in master bedroom

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The term master bedroom is falling out of favor in the Washington D.C. area:

A survey of 10 major Washington, D.C.-area homebuilders found that six no longer use the term “master” in their floor plans to describe the largest bedroom in the house. They have replaced it with “owner’s suite” or “owner’s bedroom” or, in one case, “mastre bedroom.”

Why? In large part for exactly the reason you would think: “Master” has connotation problems, in gender (it skews toward male) and race (the slave-master).

Enter the owner’s suite…

Winchester, Pulte Homes, NV Homes and Ryan Homes (both under the NVR Inc. umbrella), Van Metre Cos. and D.R. Horton Inc. have all replaced “master” in their floor plans, some more recently than others…

Over time, “master” will be filtered out entirely, he said. The change is “just working through the industry, and finally, bingo, we got it.”

Randy Creaser, owner of D.C.’s Creaser/O’Brien Architects PC, said he ditched “master” in the early 1990s in his home designs. He vaguely recalled a few lawsuits brought against builders over the phrase. Pulte spokeswoman Valerie Dolenga said Pulte made the shift maybe three or four years ago.

How long will it take to get through the entire industry? This clearly hasn’t reached HGTV yet…

Housing markets could benefit from Latinos who want to buy their first homes

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The executive director of the National Association of Hispanic Real Estate Professionals says many Latinos want to purchase homes:

Q: Your report (“The State of Hispanic Homeownership” at NAHREP.org), assembles data from a number of private and governmental sources, and contends that the number of Hispanic homeowners has grown to 6.69 million in 2012 from 4.24 million in 2000 and that they represented 51 percent of the total net increase of 694,000 owner-households in the United States in 2012. Considering the nation’s economic circumstances, that sounds pretty good. Yet, you say they’re facing head winds?

A: Even to our surprise, Hispanic homeowners seem to be very resilient, especially coming off the (housing) crisis. Affordability is at an all-time high and a lot of Hispanics have jumped into the market recently. Some of the biggest factors in this are household formation, income trends and overall consumer confidence. They’re forming households at a faster rate than the general population. If you look at the market of Hispanic households, they’re much more likely to be made up of a husband and wife with children, (an arrangement that’s) much more aligned with the purchase of a home.

But there are a couple of major barriers to this trend continuing, and though difficulty in accessing mortgage credit is an important one, even more important right now is the lack of inventory of houses for sale…

The fulfillment of this scenario of Hispanics being a dominant force in future homebuying will require the industry to be able to adapt to cultural nuances. And basically, NAHREP is saying the industry isn’t there yet. Twelve years ago, when we started this organization, we were selling a vision that few people bought into. It’s not really like that anymore — the major players in housing now understand, or are starting to understand, how important the Latino market is.But there are nuances to working with the Hispanic market — there’s language, of course, and the likelihood of so-called “thin” credit files (that limit access to mortgages) within a culture where having debt is not a desirable thing.

The housing market could benefit from such a reservoir of buyers. For example, those baby boomers who want to unload their homes in the near future may just want to access possible Latino buyers. Plus, the one cited figure above seems to suggest that some of the uptick in housing in the country can be attributed to Latinos. But, assuming different groups in the United States want to or perhaps more importantly can, given the wealth differences in the United States, purchase homes is not a given. There are still big gaps in homeownership rates by race and ethnicity.

It would be interesting to hear how real estate agents and others in the real estate industry are really adjusting their methods for potential Latino customers.

“4 Reasons to Own a Smaller Home” and not a McMansion

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One writer gives four reasons for eschewing a McMansion and instead purchasing a smaller home:

1. Your mortgage will be smaller.
The most obvious advantage of living in a small home is the cost. Some wee homes are priced in the five-figure category, which could translate into a mortgage less expensive than your car insurance payment. Or, if it’s a real cheapie, you could pay cash for your new small home and kiss your mortgage good-bye forever.

2. Your taxes will be cheaper.
There are many factors that influence taxes, including house square footage and lot size. A smaller house usually means a smaller tax bill. Make sure you research your chosen town and state before settling on a home. We suggest plugging the address into Propertyshark.com before even picking up the phone to call the listing agent.

3. You will reduce your carbon footprint and save money on utilities.
Living simply means consuming less resources and creating as low an impact as possible upon the environment. That’s tough to do when you live in a sprawling 3,000 square foot manse with central air conditioning in a planned neighborhood with no trees or wild land for miles around. Furthermore, it takes a lot of heating oil to keep a big house warm, particularly if you live in cold climes. A strategically-placed pellet stove, on the other hand, could heat an entire 800-square-foot cottage. A smaller house also means a smaller electric bill.

4. Your house will be unique.
When your living space is small, you must get creative with how you use it. Gone are the days of devoting entire rooms to storage. Every nook and cranny of your home is essential, so it’s up to you to figure out how to make it work. This is a good thing. It forces you to carefully consider purchases and evaluate the necessity of the belongings that you do have. Additionally, it turns your house into something that is uniquely yours and adds character to your home. After all, isn’t that what turning a house into a home is all about?

This is a decent comprehensive list of complaints people have about McMansions: the first three reasons cover the financial aspects, the third also discusses the green or sustainability issue, and the fourth gets at the mass-produced nature or the poor quality of McMansions. Perhaps the only thing left to add is the negative neighborhood or community life that McMansions supposedly contribute to?

What would the flip side of this be – 4 reasons to purchase a McMansion? Here is a start. 1. You get a bigger house. 2. You get a bigger house for less money compared to a custom-designed house or one put together by an architect. 3. At least the front of the house will look impressive and large. 4. It is likely to be a newer house with fewer problems.

Consumer Report says buyers don’t want exurban McMansions; they want other features

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Consumer Reports lays out five features homebuyers want – and these five features are not usually associated with McMansions.

Homebuyers have become more practical since the housing market crisis—they don’t want cavernous entryways but they do want plenty of storage space. They want to be close to their jobs and integrated into their communities. And they want to keep their energy costs low. In today’s market, a McMansion in the exburbs may be a tough sell. Price is still primary, but if you’re thinking of buying or selling a home, you should learn how buyers’ preferences have changed since the last time you were in the market. Here are the five features today’s homebuyers want most.

Proximity to work…

Energy efficiency…

Lots and lots of storage…

Quality of space, not quantity…

Connection outdoors, and to the community beyond…

Perhaps this could be summed up as a McMansion double-whammy: not only did you buy a house that a lot of Americans criticize, now fewer people want to buy it from you which would help you leave such a house.

There are a couple options available to McMansion owners and builders:

1. Hunker down and find the segment of the real estate market that still wants McMansion. And there are still people who do.

2. Retrofit their existing McMansions. There might be some relatively easier fixes in the areas of energy efficiency or developing storage space. The location aspects or connecting to the surrounding community might be harder.

3. Take a decent loss on the McMansion and move on.

We’ll see what happens to aging McMansions. I don’t think this is going to happen in large numbers anytime soon but if they could be built quickly, could they also be torn down and replaced quickly?

Millennials want smaller, smarter, purposeful, customizable homes

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A new real estate survey from Better Homes and Gardens suggests Millennials have different tastes in homes:

Better Homes and Gardens® Real Estate today released national survey findings of 18-35 year-old Americans that reveal the next generation of homeowners are rewriting the rules to homeownership and reinterpreting traditional norms to fit their values. Results indicate that the next generation of homeowners seeks essential, purposeful homes (77%) equipped with the technological capabilities they have grown accustomed to, as opposed to stereotypical luxury homes preferred by many in their parents’ generation. The findings also demonstrate that 82 percent of “Millennials” surveyed embrace their independence with gusto and prefer to handle home improvements on their own instead of turning to their parents for money; a stark contrast to the general misconception that paints young Americans as coddled or entitled.

“It’s critical that real estate professionals understand what embodies a quintessential home for the Millennial generation, which vastly differs from the traditional norms of generations before them,” said Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. “These survey findings allow our brand to continue to best serve the next generation of homebuyers and find homes that can or do appeal to their lifestyles and unique spirit. Understanding technologies to communicate with this generation is now only one piece of the puzzle for agents; ‘smart’ technological capabilities must now be ingrained into the home itself.”…

Unlike their Baby Boomer parents, 77 percent of Millennials surveyed would prefer an “essential” home compared to a grand stereotypical luxury home. This generation wants their living quarters to be as unique as they are; more customized and less “cookie cutter” (43%). To that end, Millennials seek for each room of their home to serve a purpose fit for their lifestyle. For instance, 1 in 5 of survey respondents agree that “home office” is a more appropriate name for their dining room based on what they typically use it for, and 43 percent would like to transform their living room into a home theater.

If this is true across the board for Millennials, what sort of current housing options appeal most to them? Gentrifying neighborhoods? Urban lofts? New Urbanist developments? It would be fascinating to see some builders and developers go after this age group like they might with Dell Webb type communities that are clearly intended for a certain age range. However, this might not be as lucrative as providing housing for older buyers and such a sales pitch might go against the independent streak of Millennials…

McMansions vs. trees in Bethesda, Maryland

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Here is how the community of Bethesda, Maryland is planning to save trees from an onslaught of McMansions:

County Executive Isiah Leggett last year introduced a Tree Canopy Conservation bill that would force private property owners in small lots to pay a still-to-be-determined fee for lost canopy into a fund that Montgomery would then use to plant new trees.

Now, the County Council is wrangling with both sides to find a compromise.

Members of the building industry say the county shouldn’t legislate tree protection on private property, that they already avoid removing trees because of associated costs and that existing stormwater management requirements make protecting trees extremely difficult.

Some conservationists say the bill doesn’t go far enough, that replacing mature trees with new ones still takes away from the canopy, which everybody agrees is important for environmental and economic reasons.

Sounds like a typical suburban debate: should green interests or building/economic interests win out? The article doesn’t say this but I imagine there might be some old-timer versus newcomer aspects to this debate. If you have lived in the suburb for some time, trees are a good thing. They are not only green, they look better, suggest neighborhoods have stability, and contribute to higher housing values. If you are a builder or involved in real estate or want to move into places like Bethesda, you might want to pay less attention to trees and introduce new housing options.

One interesting note in the debate: there was some conversation about what percentage of tree canopy is desirable in a community. One pro-housing advocate suggested Bethesda already has more tree cover than much of the county. Just how much tree cover is necessary? Is a certain percentage related to housing values?

The most common words found in American real estate listings

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A new analysis looks at the 100 most common words found in American real estate listings with “beautiful” sitting at #1:

Point2Homes, which provides marketing services to real estate agents, ran the numbers on 300,000 active listings in the United States in the first half of 2012 to see which household features and characteristics were thought by their listing agents to attract buyer interest. Though such chestnuts as “must see” and “spacious” pervade the listing verbiage, it was interesting to note which other specifics appear to merit singling out, according to Roxana Baiceanu, a spokesman for the company…

But she said the analysts were a bit surprised to see the emphasis on such specifics as hardwood floors and stainless steel, which placed second and third, respectively, on the overall frequency list.

In all, the top 100 terms aren’t particularly surprising — nearly every listing in the history of American real estate would have you believe that there’s no such thing as an unappealing home. That list includes such predictables as “stunning,” “sunny,” “finest,” “perfect,” “super” and “spectacular,” along with more concrete features such as “home office,” “soaking tub” and “dishwasher.” But when Point2 started breaking the findings into geographic regions and price segments, it was a little more revealing…

Geographically, homes for sale in the Midwest and along the East Coast seem stuck in that “beautiful” rut, where that word held the No. 1 spot. But on the West Coast and in the South, “stainless steel appliances” went to the top of the heap, she said. Midwesterners also liked “fireplaces,” which showed up with two variations in the top 10; Eastern states placed a premium on “move-in condition;” the South was the only region to put the legendarily coveted “granite countertops” in its top tier of listing terms.

It is interesting to see stainless steel and hardwood floors up there. While these might be desirable features, they are relatively quick fixes to homes while other features, such as “open concept,” are harder to change.

This list suggests several things to me:

1. Selling a home involves a lot of marketing. This is obvious but seeing this list full of vague and positive words is an extra reminder.

2. This list is like a set of code words. If you aren’t familiar with real estate listings, these may strike you in one way but if you commonly see such words, you can read between the lines.

3. I wonder what happens to homes whose listings don’t feature these common words. Is there a penalty? Would this help the home stand out to a particular kind of buyer?

State of the housing market: spring here but inventory of homes for sale still down

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Even though spring is often the time when the housing market picks up, inventory is still down as we approach March:

But a return to healthy inventory levels could take years. Many homeowners can’t afford to sell because they don’t have enough equity to put into buying another house — or would have to write a check to sell. The supply of distressed houses for sale is thinning as the foreclosure crisis recedes, especially in some states. Home building, while improving, is still at low levels. And, after years of holding on, few homeowners want to sell when prices are just coming off the bottom, Realtors say.

“We’re making a painful transition from a market dominated by distressed sellers to a market in which the only people selling are people who want to sell,” says Glenn Kelman, CEO of online brokerage Redfin.

The nation now has a 4.2-month supply of existing homes for sale. A healthy market, defined as a six-month to seven-month supply, will arrive when home prices rise another 20%, estimates John Burns, CEO of John Burns Real Estate Consulting.

A jump that size will lure enough sellers to match demand pouring in from renters and investors, he says. Rising prices will also drive more home building, he says…

Nationwide, almost 28% of homeowners with a home loan owe more on their loan than their home is worth, data from market watcher Zillow show. That’s 13.8 million homeowners. They’d likely have to write a check to sell, especially if they have to pay a Realtor.

In other words, a housing recovery will still take some time. Even with foreclosures easing, prices have not recovered to the point where more people want to or can sell.

One thing I like about this article: it doesn’t engage in speculation about when the market will be back to “normal.” Too often, real estate articles are full of people making predictions about when the tide will turn. Shouldn’t years of more uncertainty like the last few years make us at least a little more conscious about making such predictions? Also, we might be closer to recognizing that perhaps times like this might be “normal” for a while.

I wonder how much this data/information is related to lower levels of mobility in the United States…

Online discussion of how to avoid selling a home to someone who will build a teardown McMansion

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I ran into an interesting online discussion originating out of the North Center neighborhood in Chicago: how can a seller keep their home from becoming a teardown McMansion? Here is the discussion starter:

To my wonderful North Center Neighbors,

My partner & I will be selling our late, well built, 2 bedrm late 1800’s home in a few months( through Baird Warner-realtors need not contact me). We have lived here for 20 yrs, and love North Center with all of it’s old homes & history, which seems to be on the endangered list, becoming prey to developers of McMansions. So…my question is this; Is there a way to ensure(legally) we don’t sell to a developer, or sell to someone who would want to do a tear down? I am a firm believer in preserving & protecting our well built old homes, which also serves to lessen the impact on the environment.

Thank you in advance for any insight.

Here are a few of the responses (separate responses in each paragraph):

No, unless it’s a landmarked property, people can do whatever they want. The good news is, many people WANT a sweet old house with a yard and will not McMansion a home if it’s a solid, well-functioning property. Good luck with your sale!

You could do a restrictive covenant. A restrictive covenant is a type of real covenant, a legal obligation imposed in a deed by the seller upon the buyer of real estate to do or not to do something. Such restrictions frequently “run with the land” and are enforceable on subsequent buyers of the property.

Yes, restrictive covenant is an option but it will decrease your ability to sell. As said, the covenant runs with the land so not only does it restrict next owner but it will also restrict future owners as well. So this will significantly bring down the sales price. I’ve actually not heard of this being done in a sale situation, just through estates and gifts of land. My guess is that your lawyer will recommend against it. However, you could discuss putting conditions in the real estate contract (which only run to the next owner). Talk to the lawyer you intend to use for the sale.

Another solution is mentioned by another commentator: blocks or neighborhoods could enact or argue for particular zoning rules that could limit what kind of teardown home could be built. Of course, it takes more work to get a lot of neighbors to agree and then have the powers-that-be put the new restrictions into practice.

I suppose another option would be to rent the current home and purchase elsewhere. Thus, the current owner still retains some control over the property even though they would then have to manage it.

Thinking more broadly, I wonder how many Americans would go the extra step to try to preserve their existing house. I suspect most Americans tend to see their homes more as temporary housing solutions rather than structures they really care about and would want to preserve for future generations. This could be a function of having suburban neighborhoods where homes may be somewhat interchangeable, an American interest in mobility, or a rise in disposable consumerism where more goods are seen as temporary.