Tag Archives: home

YOUNG PEOPLE ALL NESTY AND OPTIMSTIC: WHAT WENT WRONG?

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Art: trulia

Art: trulia

I simply don’t know what to make of this. Every young person in America apparently wants to own a home. And very few older people do.

This Trulia survey of current renters suggests that the burning desire for ownership cools inexorably under the chill wind of age and experience. Or it suggests something else. I’m quite curious about it. But I’m most curious about these Millennials being all nesty and optimistic. It actually fits my experience with them as real estate clients.

These people were supposed to be sway-backed under the burden of debt, and dismal-eyed about their employment prospects. What went wrong? Well, they’re also considered a conscientious and idealistic batch of humans. And that’s what I see.

I’m excited about the communities they’re going to build.

PEOPLE WHO OWN GREEN HOMES DESERVE BETTER CREDIT SCORES

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Honey, what's our credit score? [PD]Wikimedia

Honey, what’s our credit score? [PD]Wikimedia

People who live in green houses pay their bills. So finds a study of mortgage meltdowns: People who buy energy-efficient homes are 32% less likely to default than the average buyer.

Why? So many possible reasons. People who care about efficiency are by definition long-term thinkers. They think about the future. They make plans.

But also, people with efficient homes have lower carrying costs. Because banks don’t yet consider carrying costs in such detail, banks don’t give buyers credit for the money a low heating bill puts in the owner’s pocket. So efficient-house buyers are “richer” than banks can conceive.

And efficient homes are more likely to be bought by people with flexible mindsets, who aren’t puzzled by freakishly small furnaces, multiple fuel sources, heat pumps, heat sinks, geothermal gizmology, thick walls, and other peculiarities of green building. Flexible thinkers are also more likely to find a creative way out of a financial crunch, according to me.

This jives, oddly enough, with a study I saw yesterday linking pro-environmental behavior with the personality facets, Openness to Experience, and Conscientiousness.

WHICH REMODELING PROJECTS WASTE THE LEAST MONEY? 

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[pd] wikimedia

[pd] wikimedia

The annual home improvement survey is out, and once again the steel door tops the list of home improvements that will lose you the least money when you sell.

Clients often ask me if they should remodel the bathroom or replace the counter tops when they prepare their house to sell. They ask other agents that, too. Which is why the National Association of Realtors publishes an annual study of which home improvements buyers will pay extra for.

Yeah, none. Realtors across the country chime in, and they/we are pretty clear on this: None.

Even the steel entry door is a disappointment, with brokers estimating that buyers will pay $1,122 for your new $1162 door. Fiberglass door? Forget it. The “R” on that “I” is only 71%.

A kitchen remodel, which runs $20,000 to $50,000, nets only about 75% of your cost–at the high end! The cheaper your remodel, the smaller fraction you’ll recoup.

Most of the least-losing improvements are external: Fresh siding, garage doors, and the dearly loved steel entry door are up there. In New England, the door and even a new deck break into positive payback territory! Add two! Surround your house with decks, and make millions!

Additions–family rooms, sun rooms, and garages–are the biggest money dumps. Home office remodels are for chumps. New roofs are a ghastly miscalculation.

Here’s the thing: First impressions matter tremendously–as they should when you’re purchasing a giant consumer product with 1,000 hidden pieces that might or might not make your next 20 years a long, slow dance of regret. …Right?

So yes, no new windows. But wash the heck out of whatever windows you have. No new kitchen, but paint elderly cabinets white. If you add a sunroom ($76,000) plan on half your ROI coming back as pure joy, because it’s not going to come back as money.

If you must, if you really must, you can replace the entry door.

Check out the full list of survey items here.

 

 

THE COLORS OF 2015: CAN YOU STOMACH THEM?

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Pepto-bismol

“Coral Reef” isn’t so much a coral color as a Pepto color. Or a shade of stomach lining.

The colors of 2015: Just add a squirt of black pigment to last year’s colors. Did you know you can buy just the squirt of color, so you can mix your own paints at home?

You might want to start.

Real coral, in antique Chinese jewelry. It's more orange than pink. [PD] Wikimedia

Real coral, in antique Chinese jewelry. It’s more orange than pink. [PD] Wikimedia

Sherwin Williams is striking out for the tropics with something called “Coral Reef.” I painted my kitchen this color once, and lived to regret it. It’s Pepto Bismol with a squirt of black. You’ll like it if you’ve ever dreamed of living inside of a seashell.

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Benjamin Moore: Ben is sticking with the foggy-beach palette. In 2012 Ben called for Wyeth Blue, a pale gray-blue. In 2013 Wyeth was supplanted by the unlikely and unremarkable Lemon Sorbet. In 2014, Wyeth Blue shed some of the black to return as Breath of Fresh Air. And for 2015 we have dusty and inoffensive Guilford Green, categorized as a “natural neutral.”

Pantone, which last year picked a desperately unattractive color, which I also have used in my house by accident, will not name its next color until January. Here’s last year’s Hollering Orchid, aka Purple Teletubby, aka Grape Kool-Aid.pantone-color-of-the-year-2014-radiant-orchid

Pantone has released the palette–the card of color it feels will dominate the year to come. Im glad to see gray is still in there; and orange. But the blues aren’t working for me. Especially with the grayed-out almond and custard. And there’s more pink, this time as “Strawberry Ice.” 2015colorpalette

[PD] WIkiimedia

[PD] WIkiimedia

I’m not inspired by any of these. The natural neutral green is my favorite of the lot, but it looks a little faded to me, like it’s already 10 years old. What am I in the mood for? I’m not exactly sure, but perhaps something like this: I know–same as last year.

 

 

YOUNG HOME BUYERS: THE LOST GENERATION

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Portrait of a Banker/CLouet [PD] Wikimedia

Portrait of a Banker/CLouet [PD] Wikimedia

Houses aren’t always great investments, but they are almost always a better way to spend your housing dollar than renting is. And right now, a generation of young people is missing that opportunity to build equity.

OK, not the whole generation. The real numbers: First-time home buyers normally make up about 40 percent of the housing market. Just at this lousy moment, however, they make up 33 percent. It’s the lowest fraction in decades.

I am weary of the term “perfect storm.” And while I have always been partial to the term “clusterf*ck,” it is, as my mother would say, uncouth. It’s time for a new natural disaster with poetic potential.

Idiom notwithstanding, a few tributaries pour their tears into the current swamp of mortgage woe.

1. Many banks acted deplorably; caused the housing bubble; and as a result, made abject groveling for credit harder than ever.

2. Many colleges forgot their mission; students, never a particularly pragmatic demographic, apparently chose colleges for their stance on organic kale; and student debt achieved bizarre and novel proportions.

2.1 (The soaring cost of health care has also been ratcheting up alllll the money gears, too, as more medical interventions are invented and each of us feels entitled to try each of them. But I’m trying to be succinct.)

3. And a seller’s market has been holding sway, pushing up prices and undermining humble offers based heavily on borrowed money. Cash is king.

So “kids today” have a hard time borrowing, both because they’re already dragging around debt, and because banks are on shorter leashes.

So these young people are renting. Which is currently an expensive way to go, given the low supply and the high demand for rental housing. And that makes matters worse: Expensive rents make it that much harder for people to save money for a down payment. Even FHA loans require 3.5 percent down. For a $200,000 “starter home” that’s $7000.

To escape the usurious private mortgage insurance and assorted other monstrosities, you have to put down 20 percent. Otherwise, about $225 of your monthly payment will fly into the ghastly black hole of an insurance policy to protect the lending institutions from their own deplorable behavior and crummy judgement.

Result: A chunk of the population is sidelined, both from the opportunity to direct their income toward equity, and from the civic awakening that comes with writing that first property-tax check.

It seems like Things Might Happen. Losing 20 percent of first-time home buyers seems like it could produce a few ripples. But only time will tell.