Housing Boom Pushed Ownership Out of Reach For Many
--------------------------------------------------------------------------------


WASHINGTON, D.C. – Low- to moderate-income working families with children are less likely to be homeowners now than they were in the late 1970s, according to a new study of U.S. homeownership trends over a quarter century from the Center for Housing Policy, the research affiliate of the National Housing Conference. The study, entitled Locked Out: Keys to Homeownership Elude Many Working Families With Children, also found that, despite expanded efforts to boost homeownership by the last three administrations, the homeownership gap between white and minority working families with children not only did not improve, but worsened between 1978 and 2003 – specifically, the disparity widened to 26 percentage points. The study was sponsored by the Chicago Dwellings Association.

These comprehensive findings are particularly troubling because of the evidence that homeownership may play a positive role in helping children do better in school. Yet working families with children, and especially minority working families with children, are lagging far behind.

“This study takes a rare look at U.S. homeownership trends over a quarter century for an important segment of the population and finds that, contrary to what many might have expected, working families with children are less likely to be homeowners now than they were in the late 1970s,” said Jeffrey Lubell, executive director of the Center. “These findings suggest that there is much more that needs to be done to bring the American Dream within reach of working families with children, especially minority working families with children.”

The study defines low- to moderate-income working families with children as those families that earn at least the equivalent of the full-time minimum wage of $10,712 annually up to 120 percent of local area median income.

Homeownership Trends

According to the latest Census statistics, nearly 70 percent of Americans now own their homes – the highest homeownership rate on record. However, most of the gains have been among families without children and upper-income families with children. The study defines upper-income families as those families that earn above 120 percent of local area median.

Low- to Moderate Income Working Families

In 2003, the homeownership rate for upper-income families with children was 90.8 percent, while the rate for their low- to moderate-income counterparts was significantly lower at 59.6 percent – yet in 1978 some 62.5 percent of low-to moderate-income working families with children owned their homes.

Ultimately, had the 1978 homeownership rates for working families with children prevailed in 2003, an additional 2.3 million children would now be living in owner-occupied homes.

Minorities vs. Whites

In 2003, some 44.6 percent of minority working families with children were homeowners – virtually unchanged from the 44.8 percentage rate in 1978. Meanwhile, the homeownership rate among their white counterparts increased over the same period from 68.7 to 70.5 percent.

The homeownership rate for minority categories in 2003 was 42.3 percent for Hispanics, 44.6 percent for blacks and 53.6 percent for a category comprised of Asians and other minority groups. The largest gains from 1978 to 2003 were among Asians/others whose homeownership rate grew more than 10 percentage points.

Regional Findings

The homeownership rate among working families with children was lowest in the West at nearly 52 percent in 2003, down from 54 percent in 1978. Rates have declined the most in the Midwest from almost 72 percent in 1978 to nearly 68 percent in 2003.

In 2003, disparities among minority working families with children and their white counterparts grew most in the Northeast with a homeownership rate for minority working families with children of 33 percent compared to a 73 percent rate for their white counterparts – a gap of some 40 percentage points.

Cities, Suburbs and Non-Metro Areas

The disparity between the homeownership rates of minority and non-minority working families with children is greatest in the central cities where approximately 60 percent of white working families with children own their homes compared to 36 percent of their minority counterparts, a difference of 24 percentage points.

By comparison, in the suburbs some 74 percent of white working families with children are homeowners compared to 53 percent of their minority counterparts. In non-metro areas, the comparable homeownership rates are 71 percent and 51 percent, respectively.

The Homeowners Income Gap

One of the demographic trends underlying homeownership rates among working families with children is the change in household composition that has occurred since 1978. In 2003, single-parent households comprised some 36 percent of working families with children, double the 18 percent rate in 1978.

In addition, the Center’s research shows that in many housing markets the incomes of working families with children failed to keep pace with the rising costs of housing. Between 1978 and 2003, the homeownership costs of working families with children – including mortgage payments, utilities, taxes and insurance – increased by 233 percent, some 32 percentage points more than the 201 percent growth in incomes of these families over the same period.

This gap was even more pronounced for minority working families with children. Among minority working families with children, total homeownership costs increased 264 percent between 1978 and 2003, some 60 percentage points above the 204 percent growth in incomes over this period. For white working families, total homeownership costs increased by 229 percent between 1978 and 2003, about 29 percentage points more than the 200 percent growth in incomes.

home buyers can pay $2,500 upfront to be represented by a realtor

SEATTLE -- Seattle-based Progressive Homesellers has launched a new program in which home buyers can pay $2,500 upfront to be represented by a realtor who rebates their entire commission at closing. Because the buyer's agent commission is usually 3% of the purchase price, the buyer of a typical $400,000 Seattle area home would be rebated $12,000 at closing.

Progressive Affiliated Realtors do not show houses. Instead, buyers are advised to view homes themselves by attending open houses or scheduling an appointment with the agent representing the seller. The Progressive Affiliated Realtor handles every aspect of the transaction including drawing up, presenting and negotiating the purchase contract as well as coordinating with lenders, title companies and escrow.

"There's no reason that an agent selling a million dollar house should receive five times the commission of one selling a $200,000 house," said Progressive Homesellers CEO Jeremy Stamper. "Percentage based commissions don't make sense and consumers deserve an alternative." Stamper explained that Progressive Homesellers' program differs from other rebate programs at companies like Zip Realty and Redfin because these services are percentage based. "These companies give buyers a percentage of the commission back, but it's still a percentage rebate, and individuals buying more expensive homes are still penalized."

Progressive Affiliated Realtors are experienced agents at full service, brand name brokerages like John L. Scott, Century 21 and Prudential. Each has at least five years of experience actively selling real estate.

But Progressive doesn't limit their flat rate strategy to just home buyers, they also offer a similar strategy to home sellers and some local Real Estate companies are very unhappy.

Coldwell Banker Bain, one of Washington State's largest residential real estate brokerages, has threatened to sue discount brokerage Progressive Homesellers, complaining that the Seattle startup is unfairly competing for business by contacting its customers directly with a flat fee commission offer.


In a letter sent through their attorney, Coldwell Banker Bain cites a direct mail piece sent to one of its existing clients by Progressive Homesellers as evidence of the "company's efforts to tortiously interfere with existing listing agreements."

The direct mail piece, signed by Progressive Homesellers Broker Patrick Luckett, reads: "I noticed that your home is on the market for $399,000. If I'm correct, you'll be paying as much as $23,940 in real estate commissions. By my calculation, we will save you $9,470 by introducing you to an experienced Realtor at a brand name brokerage like Windermere or Prudential who represents sellers for a flat $2,500 fee. Please call or email me for a free introduction."

"There's nothing wrong with that letter," said Progressive Homesellers CEO Jeremy Stamper. "The reason that Coldwell Banker Bain is becoming so aggressive is that the six percent commission is being attacked from all sides and traditional brokerages are under tremendous pressure from their agents to do something about it. Unfortunately, it appears Coldwell Banker Bain has chosen litigation instead of open competition."

Progressive Homesellers has stopped soliciting active listings, not because of the lawsuit threat, but because it has recently joined the Northwest Multiple Listing Service, an organization that prohibits the practice.

National Realty News, a BEXT Inc. publication
http://nationalrealtynews.com/

Great Article By Christopher Solomon in the MSN.com real estate section.

The swelling McMansion backlash
Local governments and ordinary citizens are saying 'no' to so-called Hummer houses and starter castles. Tactics include energy-consumption restrictions, petitions and outright building moratoriums.

By Christopher Solomon

Sidebar: 5 ways to fight back
For many homeowners, less is so much more
6 ways to maximize room
Release the zoning hounds: The McMansion backlash has begun.

Reeling from the towering megahouses that have been cropping up in neighborhoods nationwide, communities aren't just standing by and letting them flourish unchallenged anymore.

From Atlanta to Austin, Texas, and beyond, more governments have started imposing stricter building limits and even temporarily halted new construction while they try to get a handle on the explosion of these 4,000- to-10,000-square-foot homes, sometimes sneeringly called "garage mahals," "Hummer houses" or "starter castles."

"It's happening in lots of places," John Nolon, counsel to the Land Use Law Center at Pace Law School in New York, said of the backlash.

Super-size me
A drive around many American neighborhoods confirms it: Today’s homes are big. No, not big -- huge. The average American home swelled from 983 square feet in 1950 to 2,349 square feet in 2004 -- a 140% increase in size. And everything about them is bigger, from their three- and four-car garages to the professional-grade stoves and refrigerators. In 2004, 43% of new homes had 9-foot ceilings, up from less than 15% in the 1980s.

Outsized houses, and criticism of them, isn’t new -- it’s happened since the Gilded Age, said Robert Lang, a professor and the director of the Metropolitan Institute, a research institute tied to Virginia Tech. The modern mega-house trend "is about a 20-year trend," said Lang, “but it’s more obvious now; people are putting more money into housing than they have been in the past."

Wrangling over the size of homes and their impact was once confined to areas where lots of money pooled -- places like Aspen, Colo., and Fairfield County, Conn. Indeed, Pitkin County, home to Aspen, is now considering a 15,000-square-foot cap on homes -- a limit discussed since a Saudi prince built a 55,000-square-foot manse there in the early 1990s.

But now mega-homes have started to appear in established city neighborhoods and suburbs nationwide. These places share one characteristic: "It's confined to growth areas with some affluence in general," said Pace's Nolon. "You see it in areas like Santa Fe and Los Angeles and San Francisco and some parts of Atlanta -- you probably don’t see it in Detroit."

The White House next door
What's behind the shift? People with money are looking back to close-in communities in or near big cities. Older, close-in communities often have more character. They also have a shorter commute.

"They love the neighborhood; the house needs improvement," Lang says of the newcomers. Much of this post-war housing -- "the housing stock that was the good life of 1955, which was defined by good job and meatloaf," said Lang -- is now tired and rather small by today's standards. Many of the homes are simply bought for the lot, razed and replaced. Naperville, Ill., a city of 130,000 people with a historic downtown that sits about 25 miles west of downtown Chicago, has seen 325 "tear-downs" since 2001.

Communities that have been dealing with an influx of large homes include Lakewood, Colo.; Arlington, Va.; Cresskill, N.J.; Oak Park, a suburb of Dallas; Austin, Texas; and Atlanta. "There are 40,000 local governments in the United States, and they make the call on this," said Nolon. "It's all kind of a grand experiment at the local level."

Many of those homes appear without much problem, said Lang. But it's the "man bites dog" examples that get people scared -- and showing up at city hall. In DeKalb County, Georgia, which includes part of Atlanta, "When it really hit the fan was in one particular community, when a developer built a replica of the White House," recalled Vernon Jones, the county's chief executive.

Austin's fight
Austin typifies the McMansion craze -- and the backlash that's followed. Several of the city's neighborhoods like Tarrytown and Travis Heights have seen an influx of large homes, said Kathie Tovo, president of the Bouldin Creek Neighborhood Association, who lives in a "funky, fun" area just south of downtown that also has seen some change. Just down the street from their modest home, Tovo and her architect husband bought a house as an investment. After they finished remodeling it, the home next door got knocked down and replaced by a 4,000-square-foot building housing two condominiums. "What had been not a tiny, but a modest-size and -scale cottage, has been replaced by something hugely bigger than what's the scale along that street," Tovo said. "The entire yard is now lined by this massive house," she says of her house.

Tovo and others, including many elected officials, worry that the homes are not only out of character with many neighborhoods, but that they put stress on older infrastructure and too quickly raise property values and thus tax rates. This forces out longtime residents, including a more ethnically and economically diverse mix of people. "Some people have made the argument that this is infill," Tovo said. "But it really isn't; you don't end up with more people, you just end up with the same number of people in bigger houses."

Hollering 'time out'
Many communities are trying different things to get a handle on the rapid changes and keep their character:

In January, the mayor of Atlanta imposed a brief moratorium on housing permits in five upscale Atlanta communities in the northeast part of the city. That has since expired, but the city is looking at rewriting some zoning codes to limit what gets built.
In Marin County, Calif.,which was forced to start dealing with the issue earlier than other places due to San Francisco-area wealth, a 1997 "big-and-tall ordinance" requires design review for any home that’s more than 4,000 square feet or over 30 feet high, said Brian Crawford, deputy director of planning services for the Marin County Community Development Agency. Why 4,000 square feet? "In 1997, 4,000 square feet was considered a large home." Now, Crawford said, "It's not unusual for us to get 6,000- to 8000-square-foot-home proposals. We had one recently that was 14,000 square feet."
Earlier this year, the county bolstered its regulations to add an array of design considerations; planners can now consider the median home size of the surrounding neighborhood when deciding whether to approve a home, he said.
After two years of study, Georgia's DeKalb County, which has seen McMansions appearing in older neighborhoods, put a new strategy on the books earlier this year: A neighborhood that doesn't want the megahouses can gather the signatures of 60% of its residents, then petition the county's board of commission for a zoning overlay. "You have to do it on a neighborhood-by-neighborhood basis," said Jones, the county's chief executive. "It gives the politicians, the elected officials a grasp of what the people really want in that area." (Read about how you can fight for your neighborhood here.)
In February, Austin put in place interim rules that limit the maximum size of a new single-family home on any lot that previously had a house. For now, a builder can build up to the greatest of the following: 2,500 square feet; 20% larger than the home that was removed; or a 0.4-to-1 floor-to-area ratio for the lot. There also are limits on major additions to homes. Meanwhile, a task force is studying the issue.
Austin residents seem torn about the regulations. Tovo has gotten calls from upset residents who see all this as a threat to their ability to sell their existing homes and land for top dollar.
A McUpside to McMansions?
That concern speaks to what some people argue are the upsides of large houses -- within reason:

Bigger homes can bring a lot more tax money to a small town that doesn't have much of a commercial tax base. "If it's an old, old neighborhood, any new development coming in can be good," said Jones. Even a mega-house is better than a crack house, he said.
People who have lived in an area a long time and bought their house cheap stand to make a lot of money as property values increase, said Lang. "If you don't think you can pay the taxes, sell the house, then downscale the living space and live somewhere else in a nice place," he said. He is not particularly sympathetic to the argument that people should be able to live in a neighborhood forever. "Who said everything's frozen for all time?" He added, "Some seniors live in an area where there's housing abandonment. I'll bet they'd like to trade."
Making big houses go green
One strategy some governments have pursued in trying to discourage larger houses, or at least shrink their impact, is to make them pay their way, energy-wise:

Shrink the energy footprint. In Marin County, Calif., where planners are now making sustainability a hallmark of the county plan, newer rules require that any project of 3,500 square feet or more, whether a new home or a remodel, meet the energy budget of a 3,500 square-foot home. In short, the bigger the house, the more efficient (relatively speaking) it has to be, said Alec Hoffmann, the county's green building program coordinator.
Think green. Also in Marin County, projects that must undergo design review, or get a variance -- that is, any home over 4,000 square feet -- must fill out a green-building checklist and meet a certain number of points.
Go big -- and pay. In Pitkin County, Colo., home of Aspen, if a new home is more than 5,000 square feet, the builder must either provide onsite renewable energy (via something like solar panels) or pay a $5,000 fee to the Colorado Office of Resource Efficiency, which will use the money for renewable energy projects elsewhere. If the house is 10,000 square feet more, the fee goes up to $10,000 if no onsite renewable energy is provided. And if a home exceeds its property's allocated energy budget as determined by local codes -- due to a large spa, a heated driveway, etc. -- the homeowner must "buy" energy from the Renewable Energy Mitigation Program, up to $100,000.
More supersized indigestion to come?
Are big houses -- and big controversy -- the future?

Some evidence suggests that for an increasing number of home buyers, bigger isn't better. Many baby boomers are now empty-nesters who need less space. The average American home size, which zoomed starting in the 1980s, gained just 25 square feet between 2001 and 2004, said Steve Melman, director of economic services for the National Association of Home Builders. (Read more about the small-house trend here.)

Yet, said Melman, there's plenty of people who apparently still want houses of 4,000 square feet and larger. Drawing an analogy, he said, "I think a lot of people still want that -- they still want the SUVs even though the price of gasoline went up." (The U.S. Census' survey of Construction reported that 0.5% of new homes constructed in 2004 and 2005 were 6,000 square feet or larger -- that might not seem like much, but that's still 10,000 homes.)

Yet the backlash, too, is just getting started, say observers. "You're going to see a lot more of this," said Lang -- especially in places like southern California and Florida that have all but run out of virgin land to build on, and where builders are eyeing older suburbs. "By 2020, this could be some nasty stuff; something could probably make its way to the Supreme Court."

This is an MSN.com article that was in the Real Estate section of the web site. It was written by By Debora Vrana and is very detailed about the female real estate market.

Homebuilders jockey for single women's business

Single women are twice as likely as single men to buy a home -- and builders are taking notice. They're betting on features like security systems, built-in vacuums and gourmet kitchens to attract this growing market.

By Debora Vrana

Single female ISO home
The great American condo glut
The art of the lowball offer
Ask 22-year-old Sarvy Danesh what she likes most about the condo she just bought and you'll get a detailed list of design features, including the colorful walls, the modern metallic light fixtures and really sleek sliding glass doors.

"It's happening; it's kicking," said Danesh who is about to graduate from UCLA. "The whole thing is really appealing to the eye."

And it's the eyes of single-women buyers just like Danesh that America's builders are jockeying for. Single women are purchasing homes in record numbers due to low interest rates, increased salaries, good credit earlier in life and later marriages. Last year, they represented 21% of all home buyers, second only to married couples, who still control a lion's share of the market, according to the National Association of Realtors.

"It'd be nice to have Prince Charming, but it's not something I'm going to wait around for," said Danesh, who was able to put about 10% down on her $600,000 Westwood, Calif., condo due to an inheritance. She said her parents began talking to her about the importance of good credit when she was 13. "I don’t need a guy to help me out," she said.

Women-friendly features
To attract single-women buyers, homebuilders -- by and large still a male-dominated group -- are struggling to design specifically for women and to market to them. "You can't ignore the second-largest segment of the market and still be successful," said Walter Molony, spokesman for the NAR. "Men don't get serious about homes until they find the right woman. But women are serious about buying homes now.”

Indeed, single women are twice as likely as single men to buy a home.

To entice women, builders are putting in:

Laundry rooms upstairs;
Skylights in bathrooms for natural light;
Slate floors that are "cleaning friendly";
Security features;
Built-in vacuum cleaners;
Gourmet kitchens;
Name-brand appliances; and
Xeroscapes and other yards with low to no maintenance.
While builders historically haven't focused on specific markets segments, that's all changing. "Builders are getting more sophisticated," said Greg Gieger, a Wall Street analyst with A.G. Edwards & Sons. "They are staring to do market research and build homes for specific markets, designing what people want.”

Gieger pointed to Los Angeles-based KB Home, one of the nation's largest builders, and Bloomfield Hills, Mich.-based Pulte Homes as two of the more cutting-edge builders in this respect.

"Every homebuilder now realizes that women have a big impact on buying homes," said Caroline Shaw, a spokeswoman at KB Home.

Martha's house
In March, homes went on the market in a Cary, N.C. neighborhood created in a partnership between KB Home and style icon Martha Stewart. The houses feature architecture and amenities inspired by Stewart’s own homes, including spa-like bathrooms, large walk-in closets, large glass showers and open shelving in the kitchen.

Ranging in price from the low $200,000s to the mid-$400,000s, the houses got strong buyer interest, with roughly 100 of the 650 single-family homes and town houses selling in one day.

"We always think about what women want, we are women," said Gael Towey, chief creative officer with Martha Stewart Living Omnimedia, who helped design the homes. "Women are so much more self-reliant. They are thinking about good investments and they know your home is a good investment."

Towey said the Martha homes have many design features that will appeal to women, especially natural light in the bathrooms. "You just look better in natural light," she said. "You feel better."

Stewart and KB Home are now planning more than 900 homes in the Atlanta area -- all of which are designed to have natural light in the bathrooms -- and will eventually take the Martha-designed homes nationwide, building neighborhoods in Las Vegas, Texas and Southern California.

"It's a home run," said Shaw.

It's all in the details
In California’s Central Coast, builder Roberta Colmer said single-women buyers bought nearly a third of the 30 homes she recently built on a bluff above Morro Bay. Colmer wasn't surprised; she had women in mind as she was building.

"We did certain things to make women feel at home," said Colmer, co-owner of Colmer Construction. "It's the little things that we put in sometimes that women appreciate."

Details like skylights in the bathrooms, security systems, lighting over all mirrors and built-in vacuums helped the $700,000 to $1 million homes sell out quickly.

Norma Petersen, in her 70s, said she loves the built-in vacuum. "It has a long hose and you can easily take it up the stairs."

Petersen bought a Colmer home last year for herself and her 91-year-old half-sister. "It's a good investment for a woman. Nowadays, people don't stay together for long. And women make good salaries now. They might as well jump in."

Growing checkbooks
Petersen has a point. Women collectively earn more than $1 trillion annually and influence $2.4 trillion of the $3 trillion in annual consumer sales, according to the Women’s Mortgage Industry Network, an industry educational group.

That in part seems to be driving their desire to marry later, live alone and buy their own homes.

Ashley Candalaria, a 22-year-old single woman who works with disabled adults, just bought a new $119,000, three-bedroom home in Rio Rancho, N.M. "My mom always taught me to do things on my own. That way, if something bad happens and I get divorced, I’m not dependent on anybody."

By 2010, the number of women-headed households with no spouse will increase to about 31 million, according to Fannie Mae, one of the nation’s largest lenders. Since 1950, the number of households headed by women has increased fourfold, largely due to the longer life expectancy of women, higher divorce rates and later marriages.

"The typical family of four went out with Ozzie and Harriet," said Mark Marymee, a spokesman for Pulte, which builds condominiums for younger, single-women buyers and caters to a lot of widowed or divorced older-women buyers through its active-adult communities for the 55-and-older crowd. "We put more emphasis on research than anyone in homebuilding," he said.

Marymee pointed to security features as one reason a recent condo project in the San Francisco Bay Area had strong interest from single women. Adjacent garages on some units allowed residents to walk straight from parking into their residences, increasing safety, he said. "Women really like security factors and consider that when deciding whether to rent or own," he said.

What do women want?

The importance of women buyers was top of the list for condo developer Justin Zavadil in north Minneapolis. "Women are capitalizing on their salaries and trying to build equity," he said. "They are buying at record rates; we need to put out a product that they want."

To Zavadil, that meant putting in stainless-steel appliances, toilets that don't use much water and softer finishes, including wood ceilings and brick and wood walls. Concrete floors are colder and not as appealing to women, he said.

Zavadil also thought a distaste for yard work made his $250,000 condos a popular choice among women. "Nobody who is working 80-90 hours a week wants to shovel snow and mow lawns," he said.

Still, all this is new territory and even 26-year-old Zavadil isn't sure his women-oriented design features are on target.

"It's a difficult thing," he said. "Who is really sure what women want?"

And in the end, it may really come down to dollars and cents -- the same for any group of buyers. Annie Salmen, 29, is going to buy one of Zavadil’s condos. A renter for more than a decade, Salmen realized she didn't want to still be renting in her 30s. "I was just throwing my money away," she said.