Eugene Oregon Real Estate Blog

Home sales fall; show faint life-signs By MARTIN CRUTSINGER, AP Economics Writer
Fri Jan 26, 6:34 PM ET
 

WASHINGTON - New home sales fell in 2006 by the largest amount in 16 years, but they were up for a second straight month in December, raising hopes that the worst of the housing downturn is coming to an end.

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The        Commerce Department reported Friday that sales last month rose by 4.8 percent, following an even bigger 7.4 percent rise in November.

Those two increases, however, were not enough to salvage the entire year, with total sales of 1.06 million units, down 17.3 percent from 2005. That marked the biggest decline since a 17.8 percent plunge in the housing downturn of 1990.

On Wall Street, the Dow Jones industrial average had another down day, falling by 15.54 points to close the week at 12,487.02.

The housing bust is occurring after a boom in which sales of both new and existing homes set records for five consecutive years. The lowest mortgage rates in four decades powered a surge in sales that was bolstered by investors making purchases in hopes of turning around and reselling the properties for quick profits.

Analysts attributed the big declines in 2006 to a cooling of that speculative boom. That reversal has given the housing industry its toughest downturn since the recession of 1990.

The slowdown trimmed 1.2 percentage points off overall economic growth in the July-September quarter. Analysts are looking for an equally severe hit in the final three months of the year, with housing expected to be a continuing drag in the first half of 2007.

The downturn has meant a break for home buyers, as double-digit price gains during the boom years have slowed considerably.

The median price of a new home sold in 2006 rose by 1.8 percent to $245,300. That was far below the 9 percent price gain turned in during 2005.

David Seiders, chief economist of the National Association of Home Builders, said he looked for home prices to continue to be depressed in 2007 as builders scramble to reduce near-record levels of unsold homes.

He said his organization's January survey of builder sentiment showed continued extensive use of incentives to clear the backlog, with 60 percent of builders surveyed offering optional items such as kitchen upgrades or decks at no charge. That's up from 41 percent at the beginning of 2006.

Other incentives include paying closing costs, which 52 percent of builders said they were doing, up from 31 percent a year ago, and paying purchasers' financing points on loans, something 30 percent of builders in the survey said they were doing.

Seiders said he looked for new home sales to be essentially flat for 2007. He predicted that new home construction, which fell by 12.9 percent last year, will fall by another 14 percent in 2007.

The cutback in building has led to thousands of job layoffs in the construction industry.

The report on new homes followed a report Thursday that sales of existing homes dropped by 8.4 percent last year to 6.48 million units. That's the biggest decline in sales of previously owned homes since 1989.

New home sales were up in all parts of the country in December except the West, which posted a 4.4 percent drop. Sales rose by 27.3 percent in the Northeast, 26.6 percent in the Midwest and a much smaller 0.3 percent in the South.

Analysts cautioned that part of the strength seen in November and December could be weather-related, given the unusually warm temperatures during those two months.

In a separate report, the Commerce Department said that orders to U.S. factories for big-ticket manufactured goods rose in December by 3.1 percent, the largest gain in three months.

The increase was led by a huge jump in demand for commercial aircraft and the biggest increase in orders for cars and trucks in more than two years. That gives hope that manufacturing activity will not be seriously affected by the housing-led slowdown.

Excluding transportation, orders for durable goods posted a solid 2.3 percent increase, the best showing in this category since last March. It's also much better than analysts had been expecting.

For all of 2006, new orders rose by 7 percent, a slight slowdown from an 8.6 percent increase in 2005.

Economic growth slowed to a lackluster 2 percent in the July-September quarter, raising concerns that the steep slump in housing could trigger an outright recession.

However, in recent weeks a number of reports have shown the year ended with stronger-than-expected activity, easing worries about such a general slowdown. Many analysts now believe the overall economy grew at a respectable 3 percent rate in the October-December period, a figure that the government will release next Wednesday

Good Monday Morning!

What a gorgeous weekend it was!  We all deserved it following the snow and ice of the prior weekend.

The statistics are in reflecting on last years Real Estate market in the Eugene and Springfield area.  The Median home price in 2006 rose 15% to $225,000.00.  This was in comparison to a 25% increase for the previous year.  The average time it took a home to sell was 53 days in 2006 in comparison to 45 days in the prior year.  The average time for a home to sell had increased even further to 68 days by December of 2006.  The inventory of homes on the market for sale also increased from 2.3 months in 2005 to an average of 3.3 months in 2006.  This means that if no new homes hit the market it would take this number of months to exhaust the existing supply of homes for sale. 

Have An Awesome Week!

Good Monday Morning!

The white stuff just keeps hanging around!  It's been many years since we have had snow on the ground for this length of time in the Eugene and Springfield area.

The Real Estate market here remains level.  There really has been little change for the past few weeks with the total number of homes on the market and the average number of days it currently takes homes to sell.  Compared to many other parts of the country the Real Estate market here looks very good.  Don't look for any huge changes over the next few weeks.  For home sellers there is a good window of opportunity to sell from now through April.  Typically, we will see the number of homes for sale increase significantly as Spring nears.  This could make for a much more competitive market and softer sales prices this year.

Have An Awesome Week!

Save Money on Heating Costs

From Deborah Fowles,
Your Guide to Financial Planning.
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Reduce Heating Costs With These Money Saving Tips
If you live in a region that is cold in the winter, heating costs take a big bite out of your monthly budget for 25 - 50% of the year. Due to the rapidly escalating costs of home heating oil, propane, and kerosene, you may be paying twice as much to heat your house as you did just a few years ago. You can cut your heating costs significantly by following these money-saving tips.

Do an energy audit of your house, identifying areas where heated air is leaking out. Check around doors, windows, fireplaces, and other areas that may feel drafty. Use caulk, weather stripping, door sweeps, plastic, and other appropriate means to close off these leaks. If your house is poorly insulated, adding additional insulation will pay for itself in reduced heating costs.

Minimize your use of ventilation fans such as bathroom fans and kitchen hood fans in winter. A bathroom fan can suck all the heated air out of the average house in little more than an hour. Over the course of the winter, ventilation fans can increase your heating costs by a surprising amount.

Don't heat areas of your house you don't use regularly, such as guest rooms. Close heating vents or turn back thermostats in those areas and close the doors for a painless reduction in heating costs.

Turn down the heat and use space heaters to heat the room you spend time in.

Keep your furnace, heat pump, or other heating equipment in top operating condition. Dirty filters reduce the efficiency of your furnace or heat pump. Poorly tuned units are inefficient and use more fuel. An annual maintenance agreement is well worth the money to ensure that your equipment is properly maintained and will last as long as possible.

Don't turn your thermostat up above the desired temperature. It won't heat up any more quickly and will make your furnace work harder. Also, while it makes sense to turn the heat back when you're sleeping or not at home, turning it down too low can actually cost you more because the contents of the house have to be re-heated in addition to the air. 68 to 70 degrees while you're home and awake, and 60 to 65% while you're asleep or not at home are reasonable temperatures.

Consider a programmable thermostat to raise and lower the temperature at pre-set times.

Check the temperature setting on your hot water heater. If you have a dishwasher, your water should be heated to 120%. Otherwise, it can be somewhat lower.

If your water heater is in an unheated space like an unfinished basement, wrap it in an insulation blanket available at hardware stores to prevent heat loss.

Wash clothes in cold water whenever possible.

It's tempting to stand under a hot shower on a cold morning for as long as possible, but cutting your shower time in half can save up to 33% on your hot water heating costs.

In winter, open the blinds and curtains on the sunny side of the house (the south-facing side) when the sun is shining and close them as soon as the sun goes down to retain the solar heat. Close curtains on the shady side of the house (north-facing side). If you don't have curtains, consider installing some. Curtains made from heavy fabric with lots of folds (fullness) can prevent cold air from seeping in and warm air from seeping out, which reduces your heating costs

Checking your furnace can lower operating costs, protect your family against fire hazards and carbon monoxide poisoning and prevent your furnace from quitting at an inopportune time – such as in the middle of a dark and snowy night.

Furnace Maintenance Checklist 

Follow these steps to help your heating system operate safely and efficiently all season long.

Turn off the electricity to the furnace. A clean filter means more efficient operation. If you haven't regularly cleaned or replaced the filter or filters, do it now and check it throughout the heating season. If you have a central air conditioning system that operates with the furnace blower, count on replacing the filter more often.
Next, remove dust from the blower blades and motor body. Oil the motor and check the fan belt by lightly pressing it. If it doesn’t give about an inch, adjust it until it does. If it shows wear, replace it. To maximize efficiency, seal the filter opening with duct tape and make sure the blower cabinet door closes firmly.
Vacuum the grills and gently clean the thermostat monthly. At least once a year, remove all of the heating system's grills, including the cold air returns, and remove any obstruction from the ducts. Check ductwork for improper connections and tape the seams with duct tape if necessary.
Perform a draft hood test for combustion air. If the furnace doesn't get enough fresh air, combustion gases, including carbon monoxide, can spill out of the draft hood and into the house rather than being drawn up into the chimney. Here is how to test for combustion air:
Close all exterior and bedroom doors. Also close all of the windows and the dampers on any fireplaces or wood stoves.
Open the interior door to the basement or furnace room. Then open any interior doors standing between the furnace and the exhaust fans for the kitchen, bathrooms, clothes dryer and other vented appliances such as the water heater.
Turn on the furnace. Wait for a few minutes for the draft to stabilize, then hold a smoking kitchen match or incense stick two inches from the draft hood opening. If the smoke draws into the draft hood, the furnace is venting properly. If it blows away from the hood, combustion gases are spilling into the house and you need to call a professional heating contractor immediately. Until the contractor fixes the problem, leave a furnace room window slightly open.

D.R. Horton home sales slide as market slows
Portland Business Journal - 1:36 PM PST Tuesday
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D.R. Horton Inc., the largest homebuilder in the nation, announced lower-than-expected first-quarter home sales Tuesday.

The Arlington, Texas-based company, which has major housing projects in Albany, Bend, Eugene and Portland, reported first-quarter sales of $2.3 billion, dramatically lower than the $3.2 billion a year earlier. Analysts estimated sales of more than $2.7 billion, even with the slumping market.

 
The company's cancellation rate -- when would-be homebuyers back out of a contract -- declined to 33 percent from 40 percent in the fourth quarter, but still much higher than in recent years.

"We continue to experience higher-than-normal cancellation rates and an increased use of sales incentives in many of our markets," company chairman Donald R. Horton said in a news release.

D.R. Horton (NYSE: DHI) has canceled or delayed plans for some subdivisions nationwide.

D.R. Horton accounted for almost one of every eight homes sold during the first half of the year in the six-county region, the largest market share in at least a decade. The first-half figure was the most recent available.

The company will release its first-quarter earnings on Jan. 23, before the market opens.

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Forecast: Steady sales to boost home prices in '07
Builders will cut construction to offset inventory surplus
Wednesday, January 10, 2007

Inman News

 
After bottoming out in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, bringing modest price increases, according to the latest forecast by the National Association of Realtors.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."

Existing-home sales for 2006 are expected to come in at 6.5 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3 percent in 2007 to $248,900.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent -- far below earlier consensus forecasts. "The current interest-rate environment and housing inventory levels present a window of opportunity for potential buyers," Lereah said.

"With all the wild projections by academics, Wall Street analysts and others in the media, it appears that much of the housing sector is experiencing a soft landing," Lereah said. "Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you're in it for the long haul, housing is a sound investment."

The unemployment rate is likely to average 4.8 percent this year, following a rate of 4.6 percent in 2006, according to NAR. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year. Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006, the survey found.

‘Build It, Just Not Here'
by Lew Sichelman

The majority of Americans prefer to keep land undeveloped. But they're not necessarily as altruistic as you might think.

Although nearly three out of four who participated in a recent survey said they oppose new development in their communities, they are more likely to be concerned about their own pocketbooks than the environment or even simply keeping things the way they are.

The survey by the Saint Consulting Group, a firm which specializes in land-use politics, found that twice as many Americans actively oppose development as support it.

Why? More than a third said they wanted to protect property values, while just 11 percent desired to protect the environment. Almost 29 percent said they wanted to preserve the character of their communities.

This is the second year for the survey, called the Saint Index by the Hingham, Mass.-based company. And it has started to "yield trends," says Patrick Fox, the international company's Boston-based president. The telephone survey of 1,000 randomly selected participants was taken last fall.

One trend is the importance voters place on a political candidate's position regarding new development and growth. More than nine out of ten say it is a key issue when they decide on who to vote for, and Fox says that "this forceful statistic corroborates last year's Saint Index, which yielded the same number."

Three out of four respondents gave local elected officials no better than a "C" when rating their performance with regard to development. And 66 percent indicated local government does a "fair-to-poor" job on planning and zoning issues. That's up from 61 percent in the first study.

Cynicism over the approval process also is growing. Last year, 70 percent said the relationship between local officials and developers make the permitting process unfair. This year, 75 percent said it is inequitable

"Development has become a clear political issue," Fox said.

According to the survey, though, "NIMBYism" is alive and well in America. NIMBY stands for "Not in My Backyard," and it is a popular rallying cry among developers who argue that anti-development factions want it both ways -- not here but over there.

"The very projects (people) oppose would probably be all right someplace else," Fox says.

The most dreaded forms of development are landfills, quarries and power plants, all of which drew a 75 percent of greater "no, not here" response.

Wal-Mart was opposed by 68 percent of those polled, up from 63 percent a year ago -- even though most said they enjoyed the "big-box" experience. Casinos were opposed by 67 percent.

Single-family housing is the most widely acceptable form of housing. Only 6 percent of those polled were against it. Apartments were opposed by 34 percent, down from 48 percent last year.

Grocery stores are more acceptable than office buildings and large shopping centers, though resistance to all of these forms of commercial development was less in this year's survey.

Published: January 10, 2007

Monday, January 08, 2007

By Dian Hymer
Inman News 
 

David Lereah, chief economist for the National Association of Realtors, recently said that the home sale market has started to stabilize and could even turn around by spring 2007. Other economists are less optimistic.

Ken Rosen, a noted real estate forecaster, predicts that it will take about three years for the San Francisco Bay Area housing market to turn around. Leslie Appleton Young, chief economist for the California Association of Realtors, thinks it will take 18 months for the California market to recover. But, in a recent survey conducted by WSJ.com, the Wall Street Journal's Web site, economists by a margin of 2 to 1 predicted that the worst was over for the housing market.

The opinions about the direction of home prices are equally diverse. Rosen sees home prices dropping by about 8 percent in the San Francisco Bay Area and 11 percent in Miami over the next few years. NAR predicts increases in home prices next year. Some think we've already hit bottom; others think we haven't hit bottom yet.

 
After this cycle is over, we'll be able to look back and pick the point at which excess inventory disappeared and home buyers were back in force. Until then it's anyone's guess as to exactly what the housing market will look like over the next few years.

Diverse opinions about the housing market are not unusual. For the last several years, many economists predicted interest rates in the 7 percent range for 30-year fixed-rate mortgages. But, that didn't materialize. In fact, lower rates fueled a hot market in which home prices rose at historic rates in many areas. This was at a time when most economists were sure that home prices had peaked.

Even though most housing experts would not recommend buying at the top of a market cycle, last years' home buyers bought with reckless abandon, confident that home prices could go nowhere but up. Now that conditions are generally better for home buyers, many are waiting on the sidelines for a clear sign that the market has bottomed out.

Most people feel more comfortable buying when there is a lot of home-buying activity. However, savvy real estate investors take a different approach. They buy when the market is soft and sell when the market is hot.

However, home buying and selling decisions are rarely based simply on whether it's the best time to buy or sell. This is because the "investor" is buying a property that will also function as a home.

Few home sellers who are happy in their current home sell just because the market is strong. On the other hand, no matter how content you are in your home, if your job moves elsewhere, you could find yourself having to sell in a soft market. Lifestyle factors impact home buying and selling decisions.

HOUSE HUNTING TIP: If you have the luxury of picking the time to buy or sell a home, you should first carefully analyze the housing market in your local area. It can be misleading to rely on a forecast that deals with the national housing market, or even a smaller regional market like the San Francisco Bay Area.

There are pockets of strength where demand is high and inventory low even in the midst of markets that are otherwise stagnant or declining. And, some markets like Utah and Washington state aren't declining at all.

THE CLOSING: When you have a grip on local market conditions, you'll be better able to decide if it makes sense to move now or to wait. But, keep in mind that waiting could cost you more if you're a buyer and yield you less if you're a seller, depending on how long you wait.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
 
 

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Mortgage Originations Projected to Drop Through 2008

Fewer mortgages will be written in 2007 because of higher interest rates and a slowing housing market, predicts the Mortgage Bankers Association.

MBA Chief Economist Douglas G. Duncan told the Associated Press that markets are normalizing after historically low interest rates spurred record numbers of home owners to buy and refinance.

The Washington, D.C.-based trade group says it expects the total value of new mortgages and refinanced mortgages to drop 5 percent this year to $2.39 trillion from $2.51 trillion in 2006. The association projected a further drop of 4 percent to $2.29 trillion in 2008 as fewer home owners refinance their mortgage.

Mortgage originations had already declined 17 percent in 2006 from more than $3 trillion in 2005, a near-record year.

Source: The Associated Press, Eileen Alt Powell (01/09/07)
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What to Know Before Buying a Fixer-Upper

A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.

Here are three major things to think about when considering a home in need of lots of improvements:

Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as — not a lot more — than other homes in the neighborhood?
How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, then take off another 10 to 15 percent for unexpected problems. If you can’t get the property for that, then it's probably a bad deal.
Prepare for the mess. Get ready for renovations to take longer than expected. Know that your life will be disrupted if you can’t afford to live somewhere else while the work is being completed.

Source: Charlotte Observer, Kathy Haight (01/08/07)
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30-Year Mortgage Rates Hold, Others Mixed

The financial markets during the first week of the year were still trying to determine how much the economy is likely to slowdown, according to experts. For the second consecutive week, Freddie Mac reported 30-year fixed loans averaged 6.18 percent.

However, other rates remained mixed. Interest on 15-year, fixed mortgages rose slightly to 5.94 percent, rates on five-year adjustable-rate mortgages moved up to 6.02 percent, and one-year ARMs slipped to 5.42 percent.

"Currently, the market is waiting for a clearer signal on the direction in which the economy is headed," says Frank Nothaft, Freddie Mac chief economist. Rates on 30-year loans declined over much of the second half of 2006 as the housing market continued to falter.

Source: St. Paul Pioneer Press, Martin Crutsinger (01/05/07)

© Copyright 2006 Information Inc.
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5 Tips for Selling a House in Foul Weather

Selling a home during the cold-weather months can be a challenge. Here are some tips for handling a sale in the dark winter months:

Don’t wait for spring. Point out to sellers that postponing can be the wrong choice when it means they must continue to pay the mortgage, insurance, and utility bills.

Get rid of the holiday decorations. “Holiday decor says to buyers that you aren’t prepared to move out so they can move in. It clutters and detracts from the home,” says Mark Nash, a real estate professional and author of the forthcoming book, Real Estate A-Z for Buying & Selling a Home.

Clean and light. Render the place dust-free and if necessary paint the walls with a light color. Linen tones are often the best.

Be creative. Nash, who sells homes in Chicago, had success last year selling an ordinary house quickly after he displayed poster-size photos of the home’s garden in full bloom near the windows.

Be realistic. No amount of creative marketing can overcome an overly steep price tag.

Source: Universal Press Syndicate, Ellen James Martin (01/04/07)
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 Borrowers eye benefits of FHA home loans
Product offers lower rates, better choices than subprime sector
Monday, January 08, 2007

By Jack Guttentag
Inman News 
 

"What type of borrower finds it advantageous to take an FHA loan?"

The answer to this question is a little different today than in 2000 when I first addressed it because FHA's market niche is smaller. This reflects developments in the conventional sector that have not been matched by FHA, including the growth in popularity of loans with no down payment, interest-only monthly payments, and option ARMs. Reflecting these developments, FHA's market share fell from about 15 percent in 2000 to about 5 percent in 2006.

The FHA Market Niche in 2006. An FHA borrower:

Has blemished credit acceptable to FHA, but not strong enough for prime pricing in the conventional market.

Doesn't need a loan larger than the FHA maximum, which varies by county. (In 2006, it ranged from $200,160 to $362,790 in the highest-cost counties.)

Can put 3 percent down in cash.

Doesn't want an interest-only mortgage or an option ARM.

Credit Requirements: At risk of oversimplifying, credit standards in the conventional market range from A+ to D-, and within that range, FHA would be about B- or C+.

FHA credit requirements overlap the higher levels of subprime requirements. A good illustration is the underwriting rules applicable to a prior foreclosure. With exceptions, FHA won't accept a loan applicant who has had a foreclosure within the prior three years. Subprime lenders may have a three-year rule for their best credit grade, but the period scales down by degrees and might be only one year for the lowest grade.

Similarly, the maximum ratio of total debt service to income acceptable to FHA is 41 percent, which is generally high relative to prime standards, but well below what passes in the nonprime sector.

A borrower who meets FHA credit standards will usually do better with an FHA loan than with a subprime loan, despite having to pay a mortgage insurance premium. The rate will be lower, the borrower will have access to a large menu of mortgages, and there are no prepayment penalties. Most mortgages in the subprime market are 2-year adjustables with large margins, which means a high probability of a rate increase after two years, and they have prepayment penalties, usually for three years.

Loan Limits: The loan limits on FHAs are a major deterrent. HUD has asked Congress to allow the same loan amounts on FHAs as on loans purchased by Freddie Mac and Fannie Mae. In 2006, this would have meant an increase to $417,000 uniform across the country.

Down Payment Requirements: In 2000, FHA's 3 percent down payment compared with 5 percent on most conventional loan programs. In 2006, however, zero-down loans were widely available in the conventional sector, while the FHA minimum of 3 percent remained unchanged. Since zero-down loans have long been available under the VA program, FHA is now the only sector that does not have them.

This disadvantage of FHA is partially offset by down-payment-assistance programs available to FHA borrowers. One form of such assistance is second mortgages at preferential rates, which is the preferred method of public agencies at the city, county or state levels. These agencies have their own eligibility rules independent of FHA.

A second form of assistance is cash contributions from nonprofit corporations. These have no repayment obligation, but the funds provided come from home sellers who take account of the contribution in setting their sales prices.

Neither type of assistance is a good substitute for a zero-down program, a bill for which was introduced in Congress in 2004. So far, however, it has not been passed.

Interest-Only Mortgages and Option ARMs. These instruments exploded in popularity after 2000, but were not available under FHA and there is little likelihood that they ever will.

Prospects For a Revival in FHA's Market Share. Congressional authorization of no-down-payment loans and a rise in loan limits would increase FHA's market share. So would an increase in public awareness that some subprime borrowers would qualify for, and do better with FHA loans.

A marked increase in FHA's market share would result from an explosion in foreclosures, which would cause a drastic restriction of lending terms in the conventional sector. This is not something I would care to see, but if it happened we will be pleased that FHA was there to help cushion the blow.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
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What's Hot and What's Not in Home Design

Mark Nash, the Chicago-based real estate broker who penned 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), has released a list of home features that remain popular among buyers and those that are no longer in vogue. His list is based on responses from more than 900 real estate professionals nationwide.

For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children.

As for what's "in," Nash found buyers are increasingly looking for some of the following features in homes:

Glass bathroom and kitchen tiles.
His-and-her home offices complete with fiber-optic cables for Internet connectivity.
Wood floors — except for those made of bamboo, which is not as durable.
Extra storage space in the form of linen closets, pantries, and luggage rooms.

With a large supply of unsold homes on the market, practitioners note that buyers have become pickier and expect homes to be in move-in condition.

Source: Washington Post, Kirstin Downey (01/06/07)

© Copyright 2006 Information Inc.