Communities enact rules to limit Teardowns
BY Joyce Nenninger and Allison Simson Question: Allison, we are beginning to see some “tear downs” in Summit County and I have really mixed feelings about the process. How do other communities deal with this issue?Answer: According to a recent article in the Wall Street Journal, ina backlash against people who tear down small – or even large – homes and replace them with outsize homes, communities across the nation are enacting stricter guidelines for demolitions and home renovations.Building codes and historic district ordinances have morphed into complex documents that place limitations on many more aspects of a home. Under a new rule in Beach Haven, N.J. , when the preservation commission receives an application to tear down a house, it imposes a six-month moratorium and looks for a buyer who will renovate.Delray Beach, Fla., first placed limitations on the style of beach homes. Then, in April, the city took it a step further by imposing a six-month construction halt in five historic districts to postpone the demolition of houses there. Sometimes fervor gets in the way of reason. In Lewes, Del., a public hearing erupted in heated debate when a resident wanted to tear down a chicken coop. Ultimately, the shed, which has no concrete foundation and lists to one side, was ordered left standing.Preservationists say the newly stringent building codes are helping communities maintain their character and add value to properties over time. But some real estate professionals say the stricter regulations are turning off potential buyers and forcing some sellers to lower their asking prices.Foreclosures outpace last year’s by 17 percentQuestion: Joyce, I have always been interested in following the foreclosure market. What is the current foreclosure rate and are these properties being picked up by investors? Answer: There were 27,064 new foreclosures nationwide during May 2006, an increase of 16.6 percent compared with the year-earlier period, according to Foreclosure.com, which tracks foreclosures.”The over paying for homes by many buyers in the past couple of years fueled by the availability of low interest rates is really starting to play out in the real estate market,” says Foreclosure.com President and CEO Brad Geisen. The total number of foreclosed homes available for sale in the United States climbed 1.9 percent from the previous month, totaling 89,327 in May.Foreclosure.com data also indicates that investors are moving quickly to purchase foreclosed properties, with more than 25,000 foreclosed homes being sold in April 2006.Golden age of McMansions fades awayQuestion: Allison, with the slowdown in the real estate market, is it still the trend to build mega-mansions?Answer: Are McMansions becoming passé? Many housing market observers say yes.McMansions are oversized homes, characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers. Although they fueled much of the housing boom, they’re losing popularity fast, according to interviews with dozens of real estate practitioners, sellers, developers, and housing economists. As aging boomers seek smaller homes and the cost of heating and repairs grows for owners of all ages, American’s thrill with big houses is fading, they say.In Boston, sales of homes with four or more bedrooms were flat in the first quarter from a year earlier while sales of homes with three bedrooms or fewer rose 14 percent. New Jersey appraiser Jeffrey Otteau says the inventory statewide for $1 million-plus homes is 13 months, twice the overall average of six months. In key Dallas Zip Codes where houses are generally four bedrooms or larger, sales fell by 31 percent in the first quarter compared to the previous quarter.In the latest quarterly survey by the American Institute of Architects, 68 percent of the 500 residential architects polled said home sizes are declining.Housing costs stimulate inflationQuestion: Joyce, how is the housing market impacting inflation? Is it real estate related or is it due to other factors?Answer: That’s a great question. The cost of housing – rents and mortgages – is behind the inflationary pressure that has hit the United States in the past few months, some economists say.The U.S. Department of Labor said Wednesday the Consumer Price Index for May showed prices outside food and energy increased a steep 0.3 percent for the third month in a row. Behind that gain was a 0.6 percent jump in housing rental costs, also known as “owners’ equivalent rent” or OER. It was the largest monthly increase since August 1990.The cost of shelter makes up 23.4 percent of the index, the single largest component. “Shelter costs have accounted for more than half of the increase in core CPI in each of the last three months,” says Patrick Jackman, economist at the Bureau of Labor Statistics, which issues the CPI data.Rising interest rates make mortgages more expensive and push more people into the rental market.London-based Capital Economics warns the rising demand for rental housing is a bad sign. “That is legitimate inflation and the Fed should worry about it,” says Paul Ashworth, chief U.S. economist at Capital Economics.Others economists aren’t so sure, including those at JPMorgan Chase, Moody’s Economy.com and Putnam. They say inflationary pressures aren’t as bad as they appear – the cost of energy distorts things – and there’s a risk the Federal Reserve Board could overreact.”The inflation story is probably being blown out of proportion,” says Mark Vitner, Wachovia’s senior economist.Fed officials are likely to react to increased inflation by raising interest rates by a quarter percentage point to 5.25 percent when they meet June 28-29. That would be the highest rate in 5? years but still below the 6.5 percent peak hit in the last rate-increase cycle in 2000.For answers to your real estate questions, call Joyce or Allison at (970) 468-6800 or 1-800-262-8442. Email: Joyce@SummitRealEstate.com, Info@SummitRealEstate.com or visit their website at http://www.SummitRealEstate.com. Allison and Joyce are both long time locals in Summit County. Summit Real Estate – The Nenninger/Simson Team is located at the Dillon Ridge Marketplace. Their long-time residency and years of real estate experience can help you make the most of any buying or selling situation. Both are Certified Residential Specialists (CRS), the highest designation awarded to a Realtor in the residential sales field. Their philosophy is simple, whether buying or selling, they understand that the most important real estate transaction is yours.
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User