Recently in Housing Category

Though spring is still a few days away, spring cleaning has already started here at The Manse. While the ground outside is still too soft and mushy to do much in the way of yard work, there's been plenty to do inside, including scrubbing the floors, cleaning windiows, and making a few repairs in the mudroom. (One of the coat hook boards came off the wall when an overenthusiastic WP nephew decided to toss his coat onto one of the hooks rather than placing it. Apparently the board carrying the coat hooks was held in place using drywall anchors rather than being screwed into the wall studs.)

Now you may wonder why I've mentioned this. It's simple.

The contractor who built this house must have been schizophrenic.

The Manse, as well as the homes on either side, were built by a contractor who is presently enjoying a stay at one of our fine state institutions...as an inmate.

The Manse shows signs of the same kind of personality as the contractor. Some things were really well done and the craftsmanship shows. Others leave you scratching your head wondering what the hell they were thinking when they were building this place. (I seem to recall that I've covered this subject some time in the past, but no matter. It's still kind of interesting.) Some examples of this dichotomy:

There are aforementioned coat hook boards. The rest of the mud room is well done, but they were too lazy to use a stud-finder to put the mounting screws into the studs.

Another mudroom issue: the door leading to the front is solid metal. The door leading to the rear has glass to let light in. Both the front and the back door should have glass (at least that's what was on the plans I saw). Glass on both doors would let the maximum amount of light in during the day, doing away with the need to turn the lights on when the sun is up. (The back door only lets light in only during the late afternoon or early evening, depending upon the time of year. Otherwise it's dark in the mudroom.)

The arrangement of the light switches is strange. Generally, when someone turns on the closest switch just inside the door of a room, it turns on the lights, either ceiling lights of a lamp plugged into a wall socket on the other side of the room. Not in The Manse. Instead, in more than half the rooms the switch turns on the ceiling fan. I guess they figured the ceiling fan was far more important than lights.

If there are more then one set of lights that are controlled by a series of switches on the wall, you'd expect the closest switch would turn on the closest lights and the farthest switch would turn on the lights farthest away. Nope, not in this house. (This is certainly the case with the switches just inside the kitchen next to the mudroom entrance.)

Then there's the 'phantom' switch. It's next to the triple light switches at the front door. In all this time I haven't been able to figure out what it's supposed to control. I've taken off the cover to see if it's even connected to the house wiring and it is. But in the seven years we've resided in The Manse we haven't been able to figure out what it's supposed to do. (After talking to friends and family about this I think that everyone's home has at least one phantom switch.)

Staying with the electrical system theme, there's the outside lights. The two lampposts at the top and bottom of the driveway and the floodlights on the side of the garage all have the same flaw: they have to be plugged in to turn them on. There are no light switches. (No, the phantom switch doesn't control the outside electrical socket into which the lampposts are plugged.) The lampposts do have light sensors on them, meaning they'll turn on automatically when it gets dark out. But we don't use them all that often. In fact they're on primarily during the winter when BeezleBub and I are clearing snow from the driveway at night. The floodlights are usually on for the same reason. (The floodlights are plugged in inside the garage, but it's a tight squeeze between the wall and the trusty F150, making it difficult to reach the plug at times.)

Another quirk: the plumbing. While the plumbing system is exceptional - PEX tubing running to both cold and hot water plenums, each tube with its own shutoff petcock - the routing leaves something to be desired. In two instances the plumbing contractor could have done a better job of routing some of the tubing. In the master bathroom it is not uncommon for the water lines to the shower and bathtub to freeze during below zero nights. Occasionally the lines to the sink also freeze up. It wasn't until we suffered our little water leak debacle last year that we discovered the tubing had been run along an uninsulated exterior joist below the bathroom.

Then there's insulation. There's plenty in the walls and the attic/eaves/roof. There was none along the rim joists (that's where the frame of the house meets the foundation), something I took care of the first year we were here. But after our water leak debacle, we found there's none between the first and second floor, something that has become de rigeur since the 90's. I think the only reason we hadn't noticed it before is because the second floor has thick wall-to-wall carpeting. (That could also be the reason the contractor didn't put any insulation in between floors.)

That's just a few things we've found that are quirky about The Manse. I could easily go on another few hundred words describing the schizophrenic nature of this house before I even got to the dumb/weird things around the outside. Maybe that's a topic for another post.

As bad as the real estate bubble and subsequent meltdown was here in the US, the bubble in China is worse and the meltdown will be far more spectacular. Unlike the one in the US, the Chinese meltdown includes entire cities built in anticipation of demands for housing, manufacturing, and consumer spending. It is this last that shows just how badly the Chinese government has overestimated the demand, particularly in light of the highly inflated prices for housing.

One other difference - while shopping malls in the US have been struggling remain open as retailers either fail or decide to move to another location (sometimes to the web), many new malls in China never had the retailers to begin with. One mall, called the South China Mall (also known as the Great Mall of China), was supposed to be the biggest retail mall in the world, with over 1500 shops under one roof. Instead it sits virtually empty, with few operating shops and even fewer customers.

To see how bad it is, an Australian news crew visited one of the new cities. Thousands of apartments sit empty, as do many of the retails shops.



Billions of dollars spent on ghost cities where very few live. This is what happens when the government decides what the demand will be rather than letting the private sector figure it out and build only what they can sell.

Some of the latest housing news shows that home values are still falling. That's not really a surprise, is it? But prices are rising in 2 cities, Washington DC and Detroit.

Detroit?

Yes, Detroit.

When you think about it it makes sense. Its real estate values plummeted to the point where the median price for a house was less than $7000. (The large number of abandoned homes and buildings in the Motor City helped suck down property values for years.) Many neighborhoods have been abandoned entirely and the city has been tearing down empty homes for some time. The population of Detroit is less than a third of what it was at its peak. In effect, property values hit rock bottom. There's only one way for them to go: up. So is it a surprise that home values are starting to climb? Some folks see an opportunity and are snapping up empty homes for bargain basement prices and fixing them up. Unless the city dies entirely the chances are the value will go up.

For the most part, things went swimmingly today.

Work went well, with a start on a couple of new projects. BeezleBub and I went to the town of Epsom to pick up his new (at least new to him) truck - a used Dodge Dakota 4X4 with less than 80,000 miles on it. Deb had the day off and was able to spend a small portion of it with a friend from work. (She also took care of the weekly grocery shopping, picking up a few extra items in light of the approach of Hurricane Irene such as a set of batteries for each of our portable radios.)

All in all it had been a pretty good day...right up to the point when the ceiling in the dining room of The Manse collapsed, accompanied by the sound of water and the thundering of 8 sets of feline paws scrambling up the stairs to the second floor and to safety.

Apparently one of Deb's favorite ways to relax - sitting in nice hot water in what we call "the whirly tub" - led to the disaster. Though I have not yet confirmed it, it appears one of the pipes or hoses that circulate water in the tub sprung a leak. This in turn led to water leaking onto the bathroom floor and between the ceiling of the first floor and the subflooring of the second floor. Eventually enough water pooled in one place and it weakened the drywall to the point where it finally gave way.

Mopping up gallons of water and clearing away sodden and broken drywall is not what I had planned to do on this Friday evening. But there it is.

So first thing Saturday morning I will be placing a call to our insurance company to make arrangements for an adjuster to come out to The Manse and assess the damage.

It will be interesting explaining to the insurance company how it is we had flooding in our home a good day and a half before Hurricane Irene even arrived.

Is it any surprise that economist Robert Shiller believes housing prices will continue to decline over the next 5 years? Not to me.

With the still large shadow inventory of foreclosed homes waiting to go on the market, prices can't help but fall. Shiller predicts prices will fall an additional 10 to 25 percent before they stabilize. That's on top of the price decline we've already seen.

U.S. home prices plunged 33 percent in 20 cities through March from their 2006 peak, reaching their lowest level since 2003, according to a Case-Shiller report on May 31. The decline signaled a "double dip" as the index fell below its previous post-housing-bubble low set in April 2009. Prices more than doubled from 2000 to July 2006.

It took six years for prices to double and will take eleven years for prices to fall back to their 2000 level, assuming the economy continues on it's bumpy path along the bottom. And should the housing market recover we can only hope we won't fall into the trap created by Fannie Mae and Freddie Mac, with 'easy money' for mortgages on homes the borrowers cannot possibly afford to pay for.

We've seen the value of our home skyrocket by 25% in a year and then roll back until it is worth 16% less than we paid for it. That's a 41% swing in value over a period of 6 years. Others have seen a worse reversal, buying at the peak of the market in 2006 and now seeing their homes being under water, worth considerably less than the mortgage on it.

I've listened to some of the talking heads over the past couple of days and more than a few have predicted a strong economic recovery during 2011. But there's still the 800-pound gorilla they're all ignoring: the housing market.

With a large shadow inventory waiting in the wings, housing prices aren't likely to be heading up any time soon. Banks are holding on to a huge inventory of foreclosed homes, hoping to dispose of them in a manner that will allow them to recoup some of their losses. But if they were to put all of them on the market over the next year the already fragile housing market would collapse and many people whose homes are still 'right-side up' would end up being upside down, meaning their homes would now be worth less than the unpaid principal of their mortgages. That in turn might encourage more homeowners with upside down mortgages walk away from them, leaving the banks or other mortgage holders in the lurch.

I've been checking the real estate listings here in central New Hampshire and one thing that stands out is the tumble in prices. (Both Deb and I like to look through the monthly/quarterly real estate slicks the various realty groups make available at the local supermarkets and banks.) Homes that had listed for $250K to $300K are now on the market for between $190K to $240K. Even some of the high-end homes on Lake Winnipesaukee listed in the millions have dropped the asking prices by up to 30%! (One property with which I am familiar was originally listed for $301,000 last year. It just recently sold for $69,000.)

The new lower prices can be seen as a long overdue correction. The housing bubble drove prices up at well above the rate of inflation for over 6 years. Maybe the most recent listings are showing a return to sanity and a more realistic value of the properties up for sale.

It is unfortunate for some of those selling their properties because unless they have owned them since before the bubble they are likely to lose money on the sale.

Unless the economic pundits take this 800-pound gorilla seriously, their predictions for the economic recovery this year can't be taken seriously either.