This fire-resistant home is the next line of defense against climate change

It is impossible to build a fully fireproof home, but researchers are now focused on making homes at least fire resistant. They have to, because climate change is increasing the intensity of wildfires around the world, putting billions of dollars’ worth of real estate literally in the line of fire.

Wildfires destroyed more U.S. homes and buildings last year than at any other point in recorded history, and the eight most destructive years for wildfires ever have been in the last 13 years.

“There is no reason to think they are going to get better,” said Roy Wright, CEO of the Insurance Institute for Business and Home Safety. “You look at this kind of impact — the variations in the climate we have had, we are far more susceptible to the size and intensity of fires.”

Roughly 14,000 homes burned to the ground in just two of the enormous California wildfires last year. Wildfire damage to residential and commercial property in California alone last year totaled nearly $19 billion, according to CoreLogic. The rainy season in California is getting shorter and the droughts more prolonged, meaning there is simply more combustible material and a greater chance of wildfires.

But it is not just California. Wright points to increasingly intense wildfires recently in Colorado, Texas, Florida, Tennessee and South Carolina. All of those states have huge homebuilding industries.

“There are steps that we can take so that the impact of that fire is narrowed, it doesn’t spread as far, and it impacts far fewer structures,” said Wright.

Wright’s insurance institute built two test homes at its facility in Richburg, South Carolina, one a typical structure, the other using fire-resistant materials and landscaping. Using large fans and ember generators, it showed how quickly one house erupted in flames, while the other did not. Though a wildfire’s wall of flame might look most destructive, 90 percent of fires are ignited by flying embers, some the size of a human hand.

“Fire resistance means you’ve incorporated building materials and design features that will get the ember exposure, will get the fire exposure, but would resist it,” said Daniel Gorham, research engineer with the institute.

Landscaping is key

The siding on the fire-resistant home was a fiber cement composite, rather than typical wood shingles or planks. This composite is offered in different colors and designs that look just like wood.

Landscaping was also key. The typical home had mulch, the fire-resistant home, rocks. The fire resistant home also had all its plantings at least 5 feet from the siding and the siding was raised 6 inches off the ground.

“We have noncombustible landscaping. In this case, we have rock mulch from zero to 5 feet away from the building. We also have the ornamental vegetation outside of that 5-foot zone, and spaced strategically,” said Gorham.

Satellites have captured embers flying up to 7 miles from a wildfire. These start secondary fires. The embers can land in gutters and siding and smolder for up to 12 hours before they ignite. Using metal instead of vinyl gutters mitigates fire risk: vinyl can melt and drop fire onto the side of the house — metal will not.

Windows and doors also need fortification in the line of fire.

“We have a dual-paned, tempered glass window, and we have a fiberglass door. Dual-paned is important because if we do get a fire here, single-paned glass would break, and then we have a window break, we now have a breach in the opening and that’s when flames and embers can get into the home,” said Gorham.

While the cost to real estate from wildfires is rising, the cost to build and landscape a fireproof home is actually the same or slightly less than the cost of a typical home. The savings is in the cement siding, cheaper than wood materials. That offsets cost increases in gutters and vents.

In the institute’s experiment, with equal amounts of embers blowing on them, the fire-resistant home did not burn at all, while the typical home, which was connected to it, was fully engulfed.

Paradise lost

“This work that we do here in the lab, this is real. I think all too often, we can watch something on TV, we can listen to it and go, ‘That’s interesting, but it won’t happen to me.’ But it does. It invades a family’s life,” said Wright.

Wright is a former FEMA official and native Californian. His parents lost their home in California’s Camp fire last year, the worst in the state’s history.

“I’ve always led my team saying, ‘Make sure we know the names of those people,’ but when that fire came through Paradise — and you get the text message from your mom that says, ‘Our home is gone. Where do I start?’ … the nature of how destructive it is hits home,” said Wright.

This business owner builds homes out of shipping containers

Carl Coffman is betting that in the near future, people will want to live in shipping containers.

After 35 years as an excavation contractor, Coffman decided he wanted to spark a conversation about climate change and natural resources. The retired contractor set up shop in Oregon City. His company, Relevant Buildings, fabricates finished homes out of recycled containers from nearby ports. He hopes to sell them for between $50,000 and $230,000.

“It’s simple if you just use these how they were designed,” he says.

Coffman’s operation sits in a gravel lot just off I-205, easily recognizable by the pile of 450-foot steel containers. A model home village features containers outfitted with windows, electrical wiring, plumbing, drywall, tiling and all the other accoutrements of a modern home. They range from single-container homes to three-container creations of more than 1,000 square feet.

Coffman’s latest project in the city of St. Helens is an eight-unit shipping container condo complex. The 650-foot, one-bedroom units are stacked together like Legos, four below and four above. Coffman is leasing the land from the city.

He’s also in the early stages of a ten-unit development in Milwaukie and a 20- to 30-unit project in Roseburg.

With affordable housing in crisis across the state, planners and developers are scrambling to accommodate new homebuilding solutions. Some alternatives include encouraging “missing-middle” housing like duplexes and triplexes. Portland recently amended its code to allow accessory dwelling units — small backyard living quarters often offered at an affordable price. And of course there are tiny homes.

Coffman insists his containers bring something different to the real estate market. They are not tiny homes, he says. Nor are they affordable housing, exactly. The St. Helens units will rent for around $1,200, and Coffman hopes to offer ownership options at or below that rate.

Coffman does hope to sell future developments to nonprofits. “Once we get to scale, we’ll make a dent in affordable housing,” he says.

The idea has the potential for provide housing at low cost. As with accessory dwelling units, developers can take advantage of modular construction. They can build the entire unit and ship it to the construction site, cutting down construction times and disruption to the neighborhood. The container homes also use only about an eighth of the wood in traditional light-frame U.S. homes.

Each home sits on a foundation and a thick bed of insulation. Various models feature different bumpouts for windows and doors welded to the container. The interiors are games of Tetris, with laundry machines in the bathroom or clever storage nooks. Some units even boast small porches.

Though relatively new to the United States, container architecture has become a worldwide fad. In an era of increasing urbanization, the structures can provide quick and flexible housing. Coffman was inspired by student housing in the Netherlands—an entire dorm built of stacked shipping containers.

With disaster resilience a frequent topic of conversation these days, Coffman says his containers are just the thing, water resistant and earthquake proof. “If you put a traditional house on a ship, stacked it seven high and sent it across the ocean, I don’t think it would do so well,” he says.

Before Coffman can scale up, however, he needs to get approved for state permits. That will require expensive testing of the homes’ structural integrity.

The entreprenueur doesn’t seem to have much of an idea of where this project will take him. So far he’s only sold two units.

He just knows he wants to shake up the traditional home building industry. “We’re trying to push back on the common way of doing things,” he says.

View the full article here at Oregon Business

Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes

Student loan debt in the United States has more than doubled over the past decade to about $1.5 trillion, and the Federal Reserve now estimates that it is cutting into millennials’ ability to buy homes.

Homeownership rates for people ages 24 to 32 dropped nearly 9 percentage points between 2005 and 2014 — effectively driving down homeownership rates overall. In January, the Fed estimated 20 percent of that decline is attributable to student loan debt.

Whether that will shift with time as the millennial generation marries and has children is the big economic question.

That’s also a big question for Michael McHale, who says as a child, he pictured a suburban, picket-fenced home he eventually wanted to own. “I can remember wanting that since I was 6, 7 or 8,” he says.

But at age 31, McHale isn’t living that dream. Instead, he and his wife rent in Danbury, Conn., an hour’s drive from the elementary school where he teaches, across the state line in New York.

Not owning a home makes him feel he has made a mistake that has kept him short of a key milestone — and his piece of the American dream. McHale says he feels trapped by his and his wife’s combined $1,200 monthly student loan bills, which prevent them from saving enough for a down payment.

And he says renting means he isn’t free to plan his life, even as their first child — a boy — is on the way. One example: decorating the baby’s nursery. “We can’t really make any actual changes. We can’t really paint too much,” McHale says.

“It seems like there’s like a debt spiral or something. When you get into a little bit of it, it just feeds back in on itself, and for us that started with student loans — that was our first debt,” he says.

It feels especially bad when he compares himself with his father’s generation. Neither his father nor his uncles were burdened by student loans. “They all owned a house and had their full-time jobs by the time they were like 21,” McHale says.

Yet many economists say this younger generation will eventually be able to buy — just later than previous generations.

“It’s not that they’re not going to buy homes. It’s just that they’ll purchase these homes later in life,” says Odeta Kushi, deputy chief economist at real estate research firm First American.

Baby boomers were 25, on average, when they purchased their first homes; millennials, by comparison, are waiting almost a decade longer, Kushi says

Many factors are contributing to this delay: People are staying in school longer, delaying marriage and having children later. This generation is just starting to buy homes, and Kushi expects to see a wave of young buyers in coming years.

“This generation will still yield the wealth benefits from becoming a homeowner, which I think is the key point,” she says.

This might already be starting to happen.

In the past two years, homeownership rates have increasedlargely because of young buyers, who are benefiting from the good economy, says Jonathan Spader, a researcher at Harvard University’s Joint Center for Housing Studies.

“Student loan debt is still a headwind, but they’re at least being buoyed by stronger incomes and employment,” he says.

People with degrees have higher incomes, which offset the debt burden. But it’s also true that people are taking longer to get their degrees, and many don’t finish school.

“Approximately 40 percent of those who start college do not finish within six years. … That’s a huge number,” says Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute.

For those people, it is the worst of all worlds — they have the school debt without the higher wages to show for it.

Christina Ward did finish her schooling, but her chosen profession in social work doesn’t pay enough for her to overcome her student debt.

“I thought that I would be able to at least make enough money to make the payments, which wasn’t true at all,” she says.

Ward racked up nearly $200,000 in loans for college and graduate school. Then she was laid off in December. At 36, she moved back into her parents’ apartment in Newark, N.J.

Ward says she and her girlfriend have had to postpone not just buying a house; her girlfriend is also putting off her graduate education.

“We definitely wanted to get married, and that’s probably going to end up taking priority over the house, because you can’t afford both,” Ward says.

But at the moment, there’s no target date for getting married either.

 

View the full article here at National Public Radio

 

Home Builders Stop Using Racist, Gender-Biased Phrase ‘Master Bedroom’

Listen up, future homeowners: unless you want to sound like a politically-incorrect asshole during your next appearance on House Hunters (more of an asshole than you sound when you walk into the kitchen of a shitball house and gasp, “Ooooooo, granite counters!!!!” like a total rube), you’ll want to stop using the phrase “master bedroom.” That’s because, according to a survey of 10 major builders in the Washington D.C. area, the word “master,” when it immediately precedes the word “bedroom” is loaded with racist and gender-biased connotations, and should therefore only be used as a word herald in the phrases “Master Blaster,” “Master P,” or “Master Shake.”

According to a recent report in the Baltimore Business Journal, “master bedroom” is falling out of favor with the next generation of home builders. The word “master,” writes the Journal’s Michael Neibauer, “has connotation problems, in gender (it skews toward male) and race (the slave-master),” which is precisely why builders are starting to abandon it in favor of a new, hopefully less-loaded phrase: “owner’s suite.”

Home builders surveyed by the Journal all expressed their desire to distance themselves from the troubling origins of “master bedroom,” and all the images it calls to mind of Calvin Candie (spoiler alert) enjoying an unbridled night of incestuous love making and white cake in his bedroom. Of course, there’s more to the change in terms than simply avoiding connotations of a patriarchal, slave-based agrarian economy — builders want to push some high-end houses:

Word of the change is now reaching the resale market, where “owner’s bedroom” is most commonly used in higher-end listings, said Brian Block, managing broker for McLean, Va.-based RE/Max Allegiance.

“The terminology has more of an upscale tone to it, particularly in some of the really large homes that truly have a large bedroom, sitting area, enormous walk-in closets, and lavish bathrooms,” Block wrote in an email. “Owner Suite conveys a sense of being distinguished, having ‘made it’ or ‘arrived’ rather than the everyday ‘Master Bedroom.’”

You see? Capitalism really is quite amazing, since it has the unique power to turn even the most well-meaning efforts at greater social and semantic consciousness into shameless marketing schemes. Enjoy all those stainless steel appliances, suckers.

 

View the full article here at Jezabel

Federal government steps up probes into foreign real estate deals

The change could make investors nervous. 

A little-known federal rule change could be making it harder for foreigners to invest in Oregon’s real estate market.

In November the Trump administration took steps toward implementing the Foreign Investment Risk Review Modernization Act, broadening the scope of the committee that investigates business transactions involving foreigners. The recent policy changes make it much easier for investigators to flag foreign real estate dealings of any kind, sending a shockwave through the real estate market.

The mandate of the Committee on Foreign Investment in the United States is to protect national security, and it’s been around since 1988. The idea is to prevent foreign interests from acquiring advanced technology or other information that could be used against the U.S.

The committee has investigated an increasing number of deals every year since 2011, and the legislation makes it likely that trend will continue. Experts predict the number of reviews could jump by 20% or more as the Trump administration intends to apply the law as broadly as possible.

The number of deals that come under scrutiny each year is less than 200, but David J.  Petersen, an attorney at Tonkon Torp, says just the threat of higher regulatory hurdles could slow down the overall real estate market. “It’s a total drag on business transactions,” he says. “Most parties aren’t going to wait around for six to 12 months for an agency to review their deal.”

The lack of data on foreign real estate deals makes it unclear how the new policies will hit Oregon, but the effect could be significant. Portland has a concentrated cluster of companies in the technology and renewables space. The West Coast is a popular target for investors from China or other Asian nations.

Presidents from both parties have used the review power before. In March, President Trump blocked the acquisition of telecommunications company Qualcomm by a Singaporean company with ties to China. In 2012, the Obama administration blocked the acquisition by a Chinese company of an Eastern Oregon wind farm near a naval base. In both cases, the presidents cited national security concerns.

The escalating trade war with China and the Trump administration’s isolationist attitudes might have influenced the policy change. In many of the high-profile real estate deals involving foreign nationals, especially on the West Coast, Chinese investors are involved.

In China, land belongs to the state, and individuals can only lease it from the government for up to seven decades. Many people in China therefore see U.S. property as a more secure investment.

“Combined with the Trump administration’s general isolationist, nationalist tendency, (the act) creates a tool the administration could use to kill real estate deals by foreigners,” Petersen says.

There have been recent signs that Chinese investors are less interested in acquiring U.S. businesses. Chinese foreign direct investment into the U.S. in 2018 fell to just $4.8 billion. That’s a precipitous dive from $29 billion in 2017 and $46 billion in 2016, according to independent researcher the Rhodium Group.

The policy change gives federal investigators latitude to look at a number of new transactions, and hand down greater penalties. The old rule stated that only deals with more than 10% foreign investment could be reviewed, but now there is no threshold.

The act casts additional scrutiny on 27 technology industries, including biotechnology, manufacturing and aviation. Investors could potentially be fined an amount equal to the value of deal. For large commercial real estate transactions, that number could stretch into the millions.

Petersen advises investors to read up on the new rules. The changes have not been widely publicized, despite the serious consequences they might incur. “It’s not a well known thing,” Petersen says, “so a lot of market participants could get caught with their pants down.”

View the full article here at Oregon Business

Federal Reserve holds interest rates steady, promises patience in 2019

WASHINGTON – The Federal Reserve is no longer in a hurry to raise interest rates in 2019, a change likely to please President Donald Trump and Wall Street investors who urged the central bank to hit the pause button on future rate increases.

The Fed opted Wednesday to leave interest rates unchanged – at a range of 2.25 to 2.5 percent – and the central bank signaled it was unlikely to hike rates soon, a big shift from December when the Fed predicted two more rate increases this year. The central bank pinned the change on the uncertainty around the slowdown in China and Europe as well as what would happen with Brexit, U.S.-China trade talks and any further government shutdowns.

“Over the past few months, we’ve seen some cross-currents and conflicting signals about the outlook,” Fed Chair Jerome Powell said. “We believe we can best support the economy by being patient before making any future adjustment to policy.”

Trump called the Fed “loco” for raising interest rates so much last year and was so angry after the December hike that he asked close advisers whether he could fire Powell, an unprecedented move that top White House officials later said wasn’t legally possible.

Powell strongly dismissed the notion that the Fed caved to Trump’s demands.

“The only thing we care about at the Fed is doing our job for the American people and using our tools appropriately. That is very strongly our culture,” Powell said at a press conference following the interest rate announcement. “We’re never going to take political considerations into account or discuss them as part of our work.”

The stock market surged after the Fed announced it would be “patient,” with the Dow jumping 1.8 percent, or 435 points, to close at 25,015. The Standard & Poor’s 500-stock index was up 1.6 percent, and the tech-heavy Nasdaq climbed 2.2 percent.

Trump tweeted, “Dow just broke 25,000. Tremendous news!”

The central bank also put out a separate statement saying it was prepared to adjust its plans for bringing down its balance sheet, another signal of greater caution and that the Fed is paying attention to Wall Street. Markets tanked after Powell said in December that the balance sheet was on “autopilot.”

Most of Wall Street is now pricing in zero rate increases this year out of fears the economy is slowing dramatically, according to the FedWatch tracker, and Trump has repeatedly told the Fed to stop raising rates. For now, the Fed is on hold, although the central bank has left open the possibility of increases later in the year.

“The FOMC has gone all-in, more or less, on the idea that the headwinds facing the economy mean that the hiking cycle is over,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics in a note to clients. He added that the Fed’s statement “oozed dovishness, for no apparent reason; what has changed?”

Powell said the central bank is “patiently awaiting greater clarity” on matters such as Brexit, the trade dispute with China, the impact of the partial government shutdown and the markets and that the case for additional rate hikes had “weakened somewhat.”

“In light of global economic and financial developments and muted inflation pressures, the [Fed] will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate,” the Fed said in its official statement.

The language in the statement marked a significant change from December when the central bank was still saying that “further gradual increases” in rates would likely be necessary.

The Fed has predicted that growth will slow from about 3 percent last year to 2.3 percent this year, a pace that is robust but noticeably less than in 2018.

Wall Street remains on edge, believing it will be easier for the economy to fall off track as growth slows.

“We think a sharp economic slowdown over the course of this year means the Fed will be cutting rates at the beginning of 2020,” said Michael Pearce, senior U.S. economist at Capital Economics.

The Fed described the U.S. economy as “solid,” a slight downgrade from last year when the central bank called it “strong,” but Fed leaders remain upbeat and said the most likely path for the economy is sustained growth, low unemployment and modest inflation.

“The U.S. economy is in a good place,” Powell said. “Generally speaking, we think the outlook is still favorable.”

The Fed also put out a separate statement Wednesday saying it will continue its gradual run down of its balance sheet – the roughly $4 trillion in Treasuries and other assets the central bank bought in the aftermath of the financial crisis. But the Fed indicated it is “prepared to adjust” its plans by altering the size and composition of its holdings “in light of economic or financial developments.”

“The Fed gave a strong message to markets that it won’t derail the expansion this time,” said Diane Swonk, chief economist at Grant Thornton. “But we’re in uncharted waters that are getting more complicated by all the political uncertainty at home and abroad.”

 

View the full article here at Oregon Live

How a recession could impact the housing market

The United States has enjoyed one of the largest economic expansions in its history since the 2008 housing bust brought the global economy to its knees. But with each passing year, the recovery gets a little longer in the tooth, prompting questions about if or when a cyclical recession might take place.

These questions have gotten louder in recent months as rising interest rates and tariffs have wreaked havoc on the stock market,which had been hitting new all-time highs on a regular basis. One of the most reliable tells of an impending recession—the dreaded Treasury bond yield curve inversion—occurred earlier this month between 2-year and 5-year Treasury bonds, leading some economists to sound their alarms.

If a recession does hit, how would it affect a housing market that’s already starting to cool? With the scars of 2008 still fresh, it’s understandable that some would worry about another housing implosion. But most real estate professionals don’t expect a possible recession to spell doom for the housing market. Some even think it would hardly affect housing at all.

“People’s incomes get squeezed [in a downturn], but they still need a place to live,” said Aaron Terrazas, Zillow’s director of economic research. “Usually what that means is they’re still in the market if they need one, but their price-point is lower.”

Housing in previous recessions

It’s somewhat counter-intuitive, but recessions don’t necessarily mean bad things for the housing market. In fact, they usually don’t.

ATTOM Data Solutions, a leading real estate data provider, looked at home prices during the five recessions since 1980 and found that only twice—in 1990 and 2008—did home prices come down during the recession, and in 1990 it was by less than a percent. During the other three, prices actually went up.

“Housing is such a basic need that it won’t necessarily do well, but [it will] at least truck along,” said ATTOM’s Daren Blomquist. “It may flatten out a bit, but people still need somewhere to live, so that basic need is going to cause how the housing market—and particularly home prices—to continue to go up.”

ATTOM data also show that rents are even less impacted by a recession. During the housing bust in 2008, the average fair market rent for a three-bedroom property, as calculated by the U.S. Department of Housing and Urban Development, rose at a steady clip even as home prices cratered. Rents likely rose as homeowners who had to go into foreclosure during the crisis added new demand for rental housing.

That doesn’t mean that every housing market in America will go unfazed. Real estate professionals like to say there’s no such thing as a national housing market, as each city has it’s own dynamics between supply and demand. Depending on the cause of the recession, it could hit some cities but not others.

For example, the recession in 2001 was caused by the collapse in stock market value of companies trying to take advantage of the newly popularized internet. This caused home prices appreciation in the San Francisco to slow, particularly at the high end of the market. But some other cities were largely unaffected.

Current housing market appears poised to weather a recession

Affordability concerns have plagued the housing market over the last few years, as home prices have long since surpassed their pre-crisis peaks in most markets. High prices have led to a slow down in housing activity, particularly in high-cost markets like San Francisco and New York.

And despite inventory spikes on the West Coast, housing supply for sale remains tight across the country, as home builders have been slow to produce. At the same time, the strong economy coupled with a millennial generation coming of age has added new demand in the housing market. Low supply and high demand means higher prices.

For a recession to impact the housing market, it would need to fundamentally alter this dynamic between supply and demand. A spike in unemployment could negatively impact demand, particularly if an intensifying trade war leads to export tariffs, which could put jobs at risk. But with unemployment already unusually low, it would take a pretty dramatic rise to cause home prices to drop.

It’s even harder to see the supply shortages being alleviated by a recession in a way that impacted prices. If a trade war leads to tariffs on imported construction materials, the cost of new home construction could rise even higher than it already is. Tight immigration policy could make construction labor more scarce as well.

“It really depends on … the magnitude of [foreign] tariffs, and then how aggressive the federal government is at placing tariffs on imports that go into the housing market,” said Ralph McLaughlin, an economist with CoreLogic.

Rising interest rates would prevent a number of potential homebuyers from qualifying for a mortgage and also lower the price point for some wealthier homebuyers. But if a recession hits, the Federal Reserve is almost certain to lower rates in order to jump start the economy, meaning any pain caused by rising rates would likely be temporary. The Fed has also signaled that in the short term it intends to keep rates where they are, and President Trump has made no secret of his opposition to the rate hikes.

The current rate on a 30-year fixed mortgage is at 4.83 percent, according to Bankrate. For perspective, rates reached highs of 18.5 percent in 1981, so even a rise above 5 percent would be historically quite low.

Why this time won’t be another 2008

For a lot of millennials, the only recession they have specific memories of is 2008. That recession not only caused complete chaos in the housing market, but was directly caused by chaos in the housing market. So it’s natural that a lot of people would equate recessions with a housing collapse, but 2008 was a unique case, and today’s housing market in many ways is the complete inverse of the housing market in the run up to 2008.

Primarily, the shoddy mortgage lending practices that flooded the market in 2004 are not present today. In the years before 2008, mortgage lenders made loans to unqualified buyers, or subprime buyers, without verified income or down payments and pushed those buyers into risky loan products that were destined to fail.

Those loans were bundled in to bonds, known as mortgage-backed securities, and dispersed throughout the entire global financial system. When the subprime loans in the subprime bonds started defaulting en mass, the securities failed, too, leading to a financial collapse on a scale never seen before.

But today, mortgage lending is so strict that some in the industry think lenders over-learned the lessons of 2008. The Dodd-Frank legislation passed during the Obama administration enacted strict standards for what types of loans the government-sponsored mortgage facilitators Fannie Mae and Freddie Mac will buy.

The vast majority of mortgage lenders originate a mortgage and then sell it to Fannie or Freddie, so mortgage lenders confirm to the strict standards set by Dodd-Frank. In short, mortgage lending practices today are air-tight, whereas in 2008 they were as sloppy and risky as they’ve ever been. As a result, subprime mortgage bond issuance is a tiny fraction of it was prior to the crisis.

One of the factors in the 2008 collapse that isn’t talked about as much is the oversupply of housing. Going into the 21st century, regional home builders consolidated to form large national companies, and they were churning out houses in volumes that dwarf the pace of building today.

Real estate speculators often purchased this oversupply, and when the crisis hit, they just let those houses go into default because they hadn’t put any money down on it anyway. This led to massive housing supply for sale during the collapse, which pushed prices into free fall. But today, housing supply today is incredibly tight.

“A correction can only go so far because of [the housing supply] dynamic,” said Eric Abramovich, co-founder of home-flipping lender Roc Capital. “I think there’s a floor [today], as opposed to 2008 when there was no floor.”

While the specific mechanics of the 2008 collapse won’t play out if there’s another recession, economists have speculated whether the psychological scars of the crisis would lead to unwarranted panic in the housing market if the economy starts turning sour.

“The psychological component I think is absolutely dark horse in what might happen in the next downturn,” McLaughlin said. “The more that we can provide data out there to help such households make more rational decisions in the housing market the better.”

 

View the full article here at Curbed

New real estate term “surban” a sign of the times

Developers are betting that millennials are demanding a new type of neighborhood. 

A strange word has entered the real estate vocabulary: “surban.”

This awkward portmanteau represents a fundamental shift in where people want to live and work. In particular, where millennials want to live and work.

Millennials, who for too long have been dismissed as golf-shunning, plastic straw-killing egotists, are finally starting to accrue power and wealth. As 30% of wealth transfers to their hands over the next few years, marketers must cater to their tastes. And one of the things they need to know is, where do these people want to live?

It’s well-known that people in their 20s and early 30s today are gravitating to cities. What remains an open question is whether they’ll stay. When millennials start to raise families and get old, will they stay in the city or retire to the suburbs? This is one of the liveliest debates in urban planning today.

Real-estate developers think they have an answer, a sort of compromise between city amenities and suburban calm. They’re calling it “surban.”

How did we get to “surban?” First, the U.S. had urban development. Then the cities grew too noisy, diseased and dangerous for affluent white people, so they fled to the suburbs,trapping minorities behind them with redlining and discriminatory housing policies.

But then, the affluent white people realized the suburbs sucked in different ways from the old city. They felt disconnected and homogenized, so they fled back, gentrifying low-income and minority neighborhoods.

For businesses, this has played out as a migration of emerging talent from the suburbs to downtown. The trend has become readily apparent in Portland’s tech scene. Nearly every startup that’s made headlines in the past few years has landed in the central city, not in the historic tech headquarters of Hillsboro or Beaverton. Intel, Salesforce and other suburban tech outposts are struggling to win back the talent they’ve lost to the big city.

Could “surban” be the answer to their talent woes? We’ll see. They could start with a catchier name.

We’ll have more on how the “surban’ ideal is shaping new Portland Metro Area developments in the upcoming February issue of Oregon Business magazine.

View the full article here at Oregon Business

6 Great Tiny House Communities

Looking to live differently? Opting to forego a traditional house or apartment for a home the size of a typical American living room would certainly be a change. If that sounds like heaven, consider a tiny house.

Tiny houses have no formal definition, but they are commonly classified as homes between 150 and 600 square feet, built as part of a do-it-yourself project or custom designed by a builder who specializes in them. They’re often built on trailers so they can be towed easily to their permanent spot or even to allow long-distance travel.

If the nomadic, portable life isn’t what intrigues you about the prospect of living in a tiny home, you may want to consider one of the tiny house communities throughout the U.S., which range from newly developed properties to well-established communities with long-term residents.

People choose to live in tiny homes for a variety of reasons, including maintaining a lower overall cost of living, being able to easily travel and opting for a minimalist, greener lifestyle. And where people embrace the tiny home life, communities tend to sprout up. Whether it’s permanent settlements with property lines, RV parks meant for tiny houses or even short-term stays for residents who don’t own one, tiny house communities serve as designated spots for people to live without having to battle zoning restrictions or private and public land use laws.

“A lot of people look at tiny homes as second homes, or in the cases of disaster, a temporary home,” says Dan Dobrowolski, CEO of Escape Traveler, a tiny house building company that also runs two tiny house villages in the U.S.

Many tiny house communities are formed by nonprofit and charity organizations to provide housing and transitional options for homeless individuals. Other communities focus more on green or minimalist living, where people make a conscious choice to live in tiny homes over larger, permanent houses.

The versatility of tiny houses and their ability serve both personal preference and lower-cost need is what’s driving the surge in popularity of tiny homes, Dobrowolski says, who has seen the Escape Traveler building company continue to grow as more people look to purchase a tiny house. A tiny house can cost between $10,000 and $60,000 to build from scratch, compared to the median home price of more than $225,000, according to real estate information company Zillow. “It’s becoming more and more mainstream because people are seeing these … solve a lot of problems,” Dobrowolski says.

Here are six flourishing tiny house communities throughout the U.S. 

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Little River Escape

Cloudland, Georgia

In the northwestern corner of Georgia, this gated community on Lookout Mountain is made up entirely of tiny houses. The property was founded by Ed Watters, who first learned about tiny houses in 2011 after having recently developed a retirement community in nearby Rome, Georgia, and was exploring more downsizing options for people as they retire, explains Sylvia Dickinson Brophy of Little River Escape. While many residents are retired and live there full time, the community also includes families with children who treat their tiny house as a vacation home. “We use river rock and gravel (on pathways), and that doesn’t really lend itself to strollers and wheelchairs. So you’ll be fine as long as you can carry your baby or use a cane,” says Dickinson Brophy, who notes that the community is considering paved pathways in some areas to help make it more handicapped accessible.

 

 

Las Vegas

Airstream Park (Llamalopolis)

Las Vegas, Nevada

Downtown Las Vegas has possibly the most famous tiny house community in the U.S. Created by Zappos CEO Tony Hsieh, the community is the permanent home to Airstream trailers, tiny houses and a few alpacas. Hsieh transformed a parking lot he owned into the existing community as part of his efforts to revitalize the city’s downtown. Guests can stay in some of the tiny houses and Airstream trailers short term, although many people live in the community permanently (by referral only, according to online reports), including Hsieh himself. Business Insider reported in 2016 that about 30 trailers and tiny houses make up the community. Being in the heart of Las Vegas also brings visitors to the community for reasons other than living the tiny lifestyle. The Airstream Park Facebook page shows corporate parties and concerts that are held on the grounds, while the free-roaming alpacas serve as an attraction to daily visitors.

 

 

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WeeCasa

Lyons, Colorado

About 45 miles northwest of Denver, WeeCasa is a tiny home resort for people looking to experience the lifestyle for a short period and also enjoy the local area at the edge of the Rocky Mountains. While WeeCasa owns many of the tiny houses on the property, others are contracted to WeeCasa to be rented out to guests. Karen Agena, director of WeeCasa in Lyons, explains that the resort was created following a local flood in 2013 that left many homes destroyed, with few short-term stay options for displaced families. The resort is particularly busy with wedding parties during the summer months, but it also serves to provide a glimpse into tiny living. Agena notes it brings many guests “who want to try it out and see if they could actually commit to it before buying a tiny home themselves.”

 

 

 

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Tiny Homes Detroit

Detroit

Created and operated by local charity organization Cass Community Social Services, Tiny Homes Detroit is a permanent tiny house community aimed at using the small size and cost of tiny homes to help resolve low-income housing needs. Those who occupy these tiny houses, funded through charitable donations, are formerly homeless, senior citizens or even low-income college students. The focus of Tiny Homes Detroit isn’t just about providing housing, which has been a part of the Cass Community Social Services program since it was founded in the 1980s, but also to provide tiny home recipients with a path to homeownership. “We were more concerned about helping people achieve the American dream,” says the Rev. Faith Fowler, executive director of Cass Community Social Services. Recipients pay $1 per square foot each month in rent while also attending a homeownership class, meeting with a financial coach and volunteering eight hours monthly for the organization. After seven years, the recipients earn the deed to their tiny house and the property it sits on, which Fowler valuates to be between $40,000 and $50,000, depending on future housing market changes. The tiny house community is currently growing, with seven completed and occupied homes, six near completion and six more ready to break ground, with a goal of 25 tiny houses total, Fowler says.

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Canoe Bay Escape Village

Near Chetek, Wisconsin

Canoe Bay started out as a community of brick-and-mortar buildings on more than 300 acres on a lake in northwestern Wisconsin and has since expanded to include a community of tiny houses used as second homes, vacation rentals and short-term stays. Dobrowolski says most people who own a tiny house at Canoe Bay come on weekends or stick to seasonal visits, especially snowbirds who live in southern U.S. during the winter. Because the community is also associated with the tiny home builder Escape Traveler, the short-term rental option serves as an opportunity for people considering the tiny lifestyle – and an Escape Traveler tiny house in particular – before actually making a purchase.

 

 

 

 

A bridge crosses over Big Creek along Route 101 that parallels the Oregon Coastline, USA.

Tiny Tranquility

Waldport, Oregon

Located on the Oregon coast, Tiny Tranquility launched in 2018 to offer nightly stays in the property‘s tiny houses, along with spaces for rent to park existing tiny houses and hook them up to available utilities. Like many tiny house communities, much of the focus at Tiny Tranquility is on easy access to outdoor attractions, including a dog park, picnic and fire pit area, greenhouse and hiking trails. While the community offers site lease agreements for as short as one month for nomadic tiny-house owners looking to move on, long-term lease agreements are also available for people looking to stay permanently.

 

 

 

 

 

View the full article here at U.S. News

In “Hell Yeah” News: More Single Women Own Homes Than Single Men

Sisters are doing it for themselves—and building equity while they do it!

All over the United States, single women are outpacing single men when it comes to homeownership. LendingTree, an online loan marketplace, determined that on average, single women own around 22 percent of homes, while single men own less than 13 percent. Considering how expensive it is to buy a house, that’s quite the statistic, particularly since the average woman in the U.S. only makes 80 percent of what the average man does.

On both coasts, almost twice as many homes are owned by women than by men. In the New York metropolitan area, single women own slightly more than 820,000 homes, while men own about 435,000. In the Los Angeles metropolitan area, women own 460,000, while men are at just 260,000.

The statistics continue to vary when you move away from the coasts. Oklahoma City, Oklahoma, proved to be the metropolitan area where single men own the largest share of owner-occupied homes, at 16 percent. But even though single men own a greater proportion of homes in Oklahoma City than they do elsewhere in the country, they still own fewer homes than single women, who own 24 percent of residential properties in the area.

Meanwhile, New Orleans, Louisiana, is the metropolitan area where single women own the largest share of owner-occupied homes. Out of the nearly 300,000 owner-occupied households in the area, single women own nearly twice as many of them than single men do: 27 percent compared with 15 percent. That’s an 11.61 percent gender gap between single homeowners! Just behind New Orleans is Miami, Florida, followed by Birmingham, Alabama.

LendingTree determined these results through analysis of the U.S. Census Bureau’s 2017 American Community Survey. For this report, LendingTree focused on owner-occupied housing units.To determine the percentage of homeowners who were either single men or women in an area, they divided the number of homes occupied by either single male or female homeowners by the total number of owner-occupied homes in an area. If you’re wondering why these percentages do not add up to 100 percent, it’s because there are other types of homeowners (i.e. married couples) in the area.

View the full article here at Apartment Therapy