Tag Archives: real estate

How life stages affect decisions about housing

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Life stages, including cohabitation or kids leaving the house, can trigger different housing choices:

Unmarried. Singles are more likely to rent and live in locations that are closer to entertainment and employment, which is why these areas are more in demand today than usual.

Togetherness. Cohabitation has been on the rise in recent decades, but homeownership rates for these couples are much lower than rates for their married counterparts.

Marriage. Marriage often increases the desire to own a home; many location and housing choices depend on income and nearby family.

Children. The addition of little ones makes owning a home feel like a necessity for many, given the desire for yards, good schools and social circles for the kids.

Children moving out. An empty nest often results in lifestyle changes, including different home-size preferences, social circles and floor-plan needs. Locational preferences also begin to shift.

The first two stages suggest a decrease in homeownership, the next two based around marriage and kids involve the more traditional American Dream, and the last seems to revert to the first two when more options are available. Are we headed toward a housing market where owning a home is primarily about kids? This has always been a key factor in moving to and living in the suburbs, which is closely linked to homeownership.

The flip side of this is to ask how real estate agents and builders will respond to these life stages. Can they afford to target each stage with specialized housing? Are there ways to have more flexible housing that can transition as the lifecourse changes?

Watch for more personal appeals from home sellers

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Personal appeals from home sellers may be the next big thing in real estate:

Watch for this to take off in home listings: Sometimes, in a bidding war, you hear about homebuyers writing love letters about themselves — words that explain what wonderful families they have, how they’re crazy about the house, etc., in order to persuade sellers to choose them over other bidders.

Now comes a vaguely comparable feature for sellers: Coldwell Banker Real Estate recently revised its listings to allow home sellers to post personal stories, photos and videos about their homes, with the aim of making their listings stand out. Among the first to take up the offer were actors William Macy and Felicity Huffman, who explained their affection for the house they’re aiming to sell in Colorado: “Felicity and I love to hike up toward Sopris Mountain, right out the back door. … We put a secret door between the kids’ bedrooms, which has been a huge hit.” The brokerage says that all of its seller-clients can add their own content to their listing pages, although it must be approved by their agents.

Positive emotions seem to be the key to such appeals. If the opposite party is touched, the home can be sold for more or bought for less. It all may seem cheesy but selling and buying a home can be a very emotional process. As economic sociologists and others have found in recent decades, such decisions are not just about dollars and cents but often include complex emotional reactions. Buying and selling certainly counts as an emotionally fraught process from the amount of money involved to the transitions involved (changing communities, jobs, etc.) to the commonly-invoked American ideals of “making it.”

I would love to see some data on this: how much does an effective letter change the price? And, on the flip side, how might a poorly worded letter damage the party who wrote it?

Building for and selling real estate to more diverse suburbs

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Builders and real estate agents are trying new approaches to match Houston’s diversifying suburbs:

Houston homebuilders, developers and Realtors are now trying to cater to this changing suburban demographic.

Realtors are taking classes in feng shui to appeal to Asian homebuyers. Local homebuilders are adding “mother-in-law” suites and casitas to their floor plans to attract Latin American buyers accustomed to multigenerational living.

Last month, Partners in Building, a Houston-based builder, announced plans to construct Mediterranean-style homes with domed roofs, Arabic-style arches and optional prayer rooms in a Sugar Land community.

“The suburbs are going to have to adapt,” Klineberg said. “These big McMansions are going to be less attractive. We need to provide more choices for people.”

Some interesting changes are likely underfoot in suburban real estate. Yet, the proposed changes may not be that large. For example, the sociologist cited at the end suggests McMansions won’t be such hot items. Maybe. McMansions could continue to thrive if they can incorporate some new styles (Mediterranean architecture) as well as new home features (prayer rooms, in-law suites). I’m guessing Klineberg means housing that is more flexible and cheaper to better suit working-class to middle-class residents who can’t afford the big suburban home yet need to be somewhat close to their suburban jobs. Again, that could go different directions: does that automatically mean more apartments and rental units or does it mean more affordable small houses, condos, and townhomes in denser neighborhoods? All together, will such changes be spread evenly throughout suburbs or will they be centered by class and race? I would guess a strong yes given the residential and class segregation present across suburban communities.

Luxury building boom continues in New York City

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The housing market may still be somewhat sluggish throughout the country but the luxury market continues to grow in NYC:

New York City developers will spend 60 percent more on new homes this year, while adding only 22 percent more units, a sign of the market’s tilt toward luxury condominiums, the New York Building Congress said.

Spending on new housing will reach $10.9 billion, the most in records dating to 1995 and $4.1 billion more than last year’s total, the trade group said in a report released today. The number of homes that money will build is 22,500, up from 18,400 in 2013.

A record wave of ultra-luxury condo projects planned or under construction in Manhattan accounts for the “wide disparity” between costs and unit production, said Frank Sciame, chairman of the New York Building Foundation, the trade group’s philanthropic arm…

Even as construction spending increases, the number of homes produced still falls far short of the 30,000-plus built annually from 2005 to 2008, the building congress said. In 2008, the city gained 33,200 units at a cost of $5.9 billion.

This echoes the larger housing market in the United States: while the market for cheaper or more affordable homes is slow, the luxury market still has plenty of builders and buyers. And we are talking about New York City, one of the places to be for the wealthy and influential.

The article also hints that New York Mayor Bill de Blasio promised lots of affordable housing in the next ten years. Having more luxury condos doesn’t necessarily preclude also building cheaper units but the statistics above suggest overall building is down. What big-city mayor could truly turn down or fight luxury projects? Cities desperately need such money even as they need to find ways to help promote housing for more average residents.

What will the closed CPS properties become?

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When the Chicago Public Schools closed nearly 50 elementary schools (part of the story of the series Chicagoland), they noted it would be difficult to sell many of these properties. Well, the first one just sold:

The Chicago Board of Education on Wednesday unanimously approved the sale of the former Peabody Elementary school site and building to the Svigos Asset Management company for $3.5 million.

The site at 1444 W. Augusta Blvd. was one of only three closed schools that reached a bid stage for a potential sale.

The other two — the former Marconi Elementary in West Garfield Park and Wadsworth Elementary in Woodlawn — will receive new bid solicitations from the school district. CPS said both the closed schools “failed to generate qualifying bids.”

The board also unanimously approved the sale of the district’s soon-to-be-vacated headquarters at 125 S. Clark St. to Blue Star Properties for $28 million.

This is a minimalistic explanation that leaves out some very important information. Like:

1. Were these fair prices for the properties? The suggestion that other properties haven’t sold does hint that CPS is asking a decent amount.

2. How are these properties going to be used? Perhaps it doesn’t matter once they generated some revenue and are now off the hands of CPS.

It still sounds like this could be a drawn-out process.

National Association of Realtors wants an exemption for drones

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The National Association of Realtors is asking the FAA to allow the use of drones for selling real estate:

The trade group last month asked the Federal Aviation Administration for a regulatory exemption to the agency’s rule on the use of unmanned aircraft for commercial purposes, saying the go-ahead would be a “game changer for the real estate industry” and a “creative and dynamic way” to present a property…

By the end of November, the FAA is expected to propose rules for the commercial use of drones that weigh less than 55 pounds.

For the real estate industry, an exemption could lead to widespread use of drones to market homes, the surrounding neighborhood and even the walk to school or drive to the closest grocery store…

“It’s great to offer an aerial view of a piece of property,” Rodriquez said. “Where it can really be used is on the home inspection side of things, inspecting roofs, before you send a live human up there. Do I think it’s going to be a game changer in the real estate industry? Possibly, but it all depends on how it’s marketed.”…

“For normal properties, normally sized properties, they are absolutely not necessary,” said Mario Greco, a real estate agent at Berkshire Hathaway HomeServices KoenigRubloff Realty Group. “It’s hard enough to take a good picture of a condo, or a kitchen, with a professional camera.

This has some interesting potential, particularly with larger properties and places with backyards that are not easily seen from street views. It is often difficult to judge a backyard with typical photos. Still, the drone photos could hide certain features, like what you see from the back patio or deck, depending on the angle.

Yet, what would stop these drones from getting shots from other properties or photographing other things while in the air? I don’t want a whole mass of regulation for this but it is hard to limit drones once they are in the air.

New York parking spots going for $1 million each

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A new development project in New York City includes the option to buy a parking spot priced at $1 million:

A new development, 42 Crosby Street, is pushing the limits of New York City real estate to new heights with 10 underground parking spots that will cost more per square foot than the apartments being sold upstairs.

The million-dollar parking spots will be offered on a first-come-first-served basis to buyers at the 10-unit luxury apartment building being developed by Atlas Capital Group at Broome and Crosby Streets, itself the former site of a parking lot. At $250,000 a tire, the parking spaces in the underground garage cost more than four times the national median sales price for a home, which is $217,800, according to Zillow…

The number of off-street parking spaces in the city was 102,000 in 2010, or about 20 percent less than in 1978, when there were 127,000 spots, according to the Department of City Planning. While scarcity is a factor in the price of parking, $1 million for a parking spot may still be a reach.

Last year, a private garage with space for two cars at 66 East 11th Street was listed for $1 million by the Manhattan real estate firm Delos. It is still available in conjunction with the sale of the building’s $50 million dollar penthouse. In April 2012, a parking space at 60 Collister Street, a loft condominium building in TriBeCa, sold for $345,459.

Over the past year, residential parking spots in Manhattan have been selling for an average of $136,052, according to Jonathan J. Miller, the president of the appraisal firm Miller Samuel.

Actually, that $1 million gets you a 99-year lease contingent on living in the building.

I understand some of the shock registered in the New York Times or at Slate, but at the same time, this is high-end real estate with the precious commodity of a parking spot. There are plenty of people who make the general argument that parking rates should rise in places like New York City to encourage more residents and visitors to use public transportation instead. Can one be in support of higher parking prices and then not like limited parking in this facility going for really high rates? Granted, there are lots of good things that could be done with $1 million – and even the Times article notes that this parking spot costs more than four times more than a median home in the US – but that could be said of a lot of consumer goods.

More on “showhome managers” living in Florida houses

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The story of a Tampa area family reveals more about “showhome managers” serving as “human props” to help sell homes:

Filling vacant houses with stuff, the firm said, “enhances the focal points, softens age and minimizes flaws.” But adding in fake homeowners adds something else entirely, Saavedra said, turning quasi-spiritual: “There’s an energy there. You can feel it. There’s something. There’s life.”…

Showhomes pays moving costs but the Muellers pay the firm about $1,200 in rent, plus all household bills. Showhomes decorators decide where things should go, and managers are responsible for faultless precision, enforced by rigorous, random inspections.

All surfaces must be regularly cleaned; weeds eradicated, car oil spots removed. Clothes in closets are to be organized by color, and contestable items — heavily religious books, personal photos — must be removed or neutralized. Every item has a rule, and everything must be exact: the rotation of pillows, the fold of towels, the positioning of toothbrushes. Even the stacks of novels casually left on the bookshelf are placed and angled with pinpoint detail.

Gatherings of more than 10 people require approval, and managers must always be prepared for surprises. Dareda has raced across town to get the home “show ready”: lights on, soft music playing, Febreze Fluffy Vanilla subtly spritzed. She said, “You just think … by golly, we’re going to just go do what it takes.” A training manual states, “Our motto is ‘A SHOWING IS NEVER REFUSED.’ ”

Serving as the unseen caretakers for a wealthier couple they’ll never meet doesn’t bug Dareda, she said, because “when I live in somebody else’s home it feels like I already know them.” She points to one of the sellers’ last vestiges, the drapes that puddle at the floor, which she calls an old-style display of wealth.

This helps fill in some details I asked for a while back though I still want to know how much added value such managers add. How much does this lived-in energy increase the value of the home?

It will be interesting to see if this catches on more widely. It requires households willing to live scripted, temporary lives in homes as well as homebuyers who want to see a sort of neutral, upscale decor.

Why is a 5,600 square foot, $3.2 million home squeezed on a small lot a “mini-McMansion”?

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Jack Osbourne recently purchased a new home in Studio City that Variety calls a “mini-McMansion”:

In late May, rock ‘n’ roll scion and budding television and documentary producer Jack Osbourne sold his refurbished 1920s Spanish-style abode in L.A.’s celeb-saturated Los Feliz area for $3.2 million and, we first heard from gossip juggernaut TMZ, he and his missus, Lisa Stelly and their toddler daughter hightailed it to the San Fernanado Valley where they spent — oddly enough — $3.2 million for a bigger and brand-spanking-new house in and unassuming but affluent, north of Ventura Boulevard neighborhood in Studio City.

Young Mister Osbourne’s new, clapboard-sided residence in Studio City — online marketing materials rather generously describe as a “Cape Cod” — sits somewhat tightly on a .27-acre corner lot with five bedrooms and 6.5 bathrooms in 5,614 square feet. (It’s really too small to be a right-proper mccmansion so, oxymoron-ish though it may be, we’ll call an architecturally jumbled mini-mcmansion. How’s that sound?

In addition to the square footage, the price, and a small lot, the continued description of the home includes some more typical McMansion features like a two-story foyer, three-car garage facing the street, and an interesting front exterior (see the picture). So why isn’t this a McMansion?

My best guess is that this home is small by celebrity standards in Los Angeles. Compared to all new homes in the United States, Osbourne’s home is more than twice the size but he doesn’t live in an ordinary place: he lives in a place with mega-celebrities. In this city, 5,600 square feet simply can’t compete with flashier and bigger homes. See some of these celebrity homes here. Since real estate is local, Osbourne’s home is just mini-McMansion rather than opulent showplace.

Bill Gates could buy every home in Boston and still have $1 billion left

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Redfin suggests Bill Gates could purchase all the homes in Boston but not Seattle :

If Bill Gates took every dollar of his net worth (most of which comes from Cascade Investment, his investment firm, as well as Microsoft), he could afford to buy every home in Boston — and still be worth more than a billion dollars, according to a new report from the online real estate site Redfin.

For the report, Redfin calculated the combined cost of every single-family home, condo and townhouse in a city by looking at home sales between April 1, 2013, and April 1, 2014. These sales were used as a representative sample of all homes in a city. The combined costs were then lined up next to the net worth of billionaires on this Forbes list. (You can find more about the methodology here.)

So for Seattle, Redfin calculated that 241,450 homes in the city are worth a combined $111.5 billion dollars. Bill Gates could afford each of the 114,212 homes they included in the Boston calculation (total cost: $76.6 billion), but he couldn’t buy every home in Seattle. The Walton family that founded Wal-Mart could afford every home in Seattle, but only if they teamed up. They could also afford every home in a lot of other cities, including Miami, Dallas and Washington.

Using the combined home prices on this list, some billionaires could settle for purchasing a few smaller cities rather than picking up one of the pricier options. Mark Zuckerberg, who reportedly spend more than $30 million last year buying up homes near his Palo Alto house, could take his Facebook money ($28.2 billion) and buy every home in nearby Berkeley ($25.9 billion, according to Redfin). Or he could decide to buy up a few Zucker-bergs (sorry) across the country, purchasing Corvallis, Ore. ($9 billion), Punta Gorda, Fla. ($10.1 billion) and Oak Park, Ill. ($7.6 billion) with $1.5 billion left over.

See the full list of billionaires and cities they could buy here. The primary purpose Redfin gives for putting this together?

Given that the average American struggles to afford a home, we wanted to illustrate just how many homes the wealthiest among us could buy.

Certainly a stark comparison between the buying power of the typical American versus the wealthiest. So is Redfin pushing hard here to criticize the .01%? It doesn’t appear that way. There is no indication how the differences between Gates, the Waltons, and others might be evened out to provide homeownership opportunities for more Americans. Or, is this more about page-clicks and driving traffic to their website? This is a relatively easy way to leverage their data capabilities and capitalize on recent talk about inequality.