Housing Market/Architecture & Design: Where The Money Isn't

Two quick things that taste great together:

First, has a really neat interactive walking tour of home remodeling projects. It's fun to play around with, but the text is what caught my eye:

Americans are obsessed with remodeling, expanding and generally improving their homes.
They spent an estimated $210 billion doing just that in 2005, according to the Remodelors Council of the National Association of Home Builders, which projects spending this year to increase to some $238 billion.
Why? Despite much talk about a real estate "bubble," most homes are expected to continue to appreciate at a healthy rate -- giving homeowners yet more equity to tap for renovations. Plus, if real estate markets start to cool as anticipated, more people may choose to fix up what they have and stay put instead of moving.

Wow. WOW. $238 million to remodel homes. And yet the author still persists in "What is this 'housing bubble' you speak of?" nonsense.

The problem with excessive remodeling is that it can be so trendy--if you put too much into the countertops, say, by the time you're ready to sell, you'll find people are suddenly liking whetstone instead of granite or whatever. Then you're sitting there with a HELOC that needs paying, mortgage bills soaring, and $10,000 in your kitchen that people think looks "tacky."

There are few instances where life sucks harder, but thanks to the wonderful people at the Wall Street Journal, we found one:

"In some places prices might fall. In others, price gains will slow," says David Berson, chief economist at Fannie Mae, the mortgage-finance company. The price gains over the past five years, which caused home values to double in many of the hottest markets, "were not sustainable," he says.

The current slowdown reflects three broad trends, according to real-estate agents and economists. One of the most important is that many speculators have started to dump homes that were purchased as investments. In addition, high prices and rising interest rates have reduced affordability for middle-class families. Finally, the intensity of recent hurricanes has prompted potential buyers of second homes to pull back in places like Florida. Some even blame media coverage that has warned of a possible downturn for triggering a real downturn.

Wow, so not only did we single-handedly sabotage the Iraq war, but we popped the housing bubble too! :) Man, I feel the power. Someone order me up countertops made out of gold from Hungary!

(Image courtesy of In Dissent.)

Posted at April 12, 2006 07:19 PM

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Two quick things that taste great together: First, has a really neat interactive walking tour of home remodeling projects. It's fun to play around with, but the text is what caught my eye: Americans are obsessed with remodeling, expanding and generally improving their homes. They spent an estimated $210 billion doing just that in 2005, according to the Remodelors Council of the National Association of Home Builders, which projects spending this year to increase to some $238 billion. Why? Despite much talk about a real estate "bubble," most homes are expected to continue to appreciate at a healthy rate -- giving homeowners yet more equity to tap for renovations. Plus, if real estate markets start to cool as anticipated, more people may choose to fix up what they have and stay put instead of moving. Wow. WOW. $238 million to remodel homes. And yet the author still persists in "What is this 'housing bubble' you speak of?" nonsense. The problem with excessive remodeling is that it can be so trendy--if you put too much into the countertops, say, by the time you're ready to sell, you'll find people are suddenly liking whetstone instead of granite or whatever. Then you're sitting there with a HELOC that needs paying, mortgage bills soaring, and $10,000 in your kitchen that people think looks "tacky." There are few instances where life sucks harder, but thanks to the wonderful people at the Wall Street Journal, we found one: "In some places prices might fall. In others, price gains will slow," says David Berson, chief economist at Fannie Mae, the mortgage-finance company. The price gains over the past five years, which caused home values to double in many of the hottest markets, "were not sustainable," he says. The current slowdown reflects three broad trends, according to real-estate agents and economists. One of the most important is that many speculators have started to dump homes that were purchased as investments. In addition, high prices and rising interest rates have reduced affordability for middle-class families. Finally, the intensity of recent hurricanes has prompted potential buyers of second homes to pull back in places like Florida. Some even blame media coverage that has warned of a possible downturn for triggering a real downturn. Wow, so not only did we single-handedly sabotage the Iraq war, but we popped the housing bubble too! :) Man, I feel the power. Someone order me up countertops made out of gold from Hungary! (Image courtesy of In Dissent.)