House as Life

Koontz - I was at a dinner party tonight-lovely evening, with food and wine and conversation and when I came home, I reflected on how my friends USE their homes for the continuation of the things they love.

One of my friends at the dinner party is an artist whose garage was converted, by yours truly, into his work studio. He has recently been working in the medium of gunpowder drawings and my last visit to his house, around December, he staged an exhibition of the creation of a drawing. It was quite a festive event-we gathered out back after dark, the only existing light being the outdoor firebox. Robb, (the artist), had a table laid out with the paper and gunpowder and he directed his helpers and the crowd on what was about to transpire. The fuse was lit, and 20 seconds later, we had Robb's latest artwork at hand. With a few "artistic" adjustments, this piece later hung in a local gallery and now hangs in Robb's living room.

The host of tonights dinner party, Lance, is my work partner's brother and one of my good friends. Lance is a musical engineer, home dad and carpenter who is currently working on drawing the plans for an addition to his home. He knows what he wants to do, he knows carpentry and computers, so why hire someone to do what he can figure out himself? It may take a bit longer, but he'll know it's right. His wife, by day a school teacher, but by avocation a horticulturist, invited me as I left this evening to come by in daylight and she would dig up a volunteer plant she's discovered in her yard that is unusually lovely. This woman could grow a flower in a junk yard, I swear. Every place this couple has ever lived has had a yard to die for, with seemingly no effort on the residents part. I know the no effort part isn't true, but she makes it look so easy you would swear you could do it too!

My partner's sister, Kim, also at the dinner party, told us that yesterday she had the living room re-textured and her beau, also at the party, is trying to figure out how to get the two pillar bookcases removed between the dining room and living room of their house to gain some additional usable square footage in the rooms. Kim and Bloyce have made an avocation out of their house. They've upgraded, re-built, repainted and improved nearly every square inch of their 100 year old property.

We talked about my partner's house, which has a veritable forest for a yard, the reason he bought the house in the first place, but now he has to search for clear space above and below the forest line to get enough sun to grow annual flowers.

What strikes me is that all of my friends tonight speak of their homes as part of how they live their lives. The homes may not be perfect-Robb and Rene kind of wish for a bit more room, Keith and Jody love the forest but could do with more sun, Lance and Pat love their locale but have to fight a bit with the layout of their place. Kim and Bloyce have gone through every room, including the outdoors and the garage and really will have no challenges left soon, and I am not thrilled with my neighborhood, but love my remoteness from neighbors and the street scene.

We all have issues with our spaces, but we also all have adapted and learned to utilize what we have to the utmost and we speak of our spaces as though they are part of how we actually function, in a day-to-day sense. I find that intriguing. Our homes as not just an abode, but as part-and-parcel of how we spend our time.

You imagine that you will have to adapt to a new beau, a child, a new pet...but how do our lives change and adapt because of where we live? And is it a positive or a negative? How does our space make us change, grow, create? And if and when we move---is it because we've exhausted our possibilities where we are? Is that what really makes us ready for change? Interesting....

Bad Loans or Bad Homeowners'?

Koontz - The latest news from the Association of Realtors addresses one of the big issues with the slew of foreclosures occurring in this new housing market-the soon to be infamous, "refinance option".

This study is possibly a bit self-serving on the Associations side. When things go wrong in any endeavor there is first a need to assign blame and then there is a furious rush to duck blame. The most recent study by The Association of Realtors undoubtedly was undertaken with the hope that it would provide a way for Realtors to pass some of the burden of blame off their shoulders regarding the mess many of their clients find themselves in now. As it happens, and assuming the study is even half right, it was a good call on the Associations part.

What they found is that at least half of the homes that went into foreclosure in the last quarter did so because the homeowners refinanced their homes (on average, twice!), pulling out the equity the high housing market had given them. According to our local Association's president, homeowners used their houses "as the new ATM".

The results were higher loans on houses, no equity in the properties and often, no improvements in the houses. In other words, the equity pulled out was not reinvested in the property. Homeowners instead counted on a continuing rising market, which would have kept their home values at pace with their loans.

But that's not what happened. Instead, the market stalled and then slumped and home values started falling. Now owners have large loans on houses that don't appraise for the amount of money loaned against them and the equity has long since been spent on...what?

Everyone may have the latest flat screen TV now, but soon they may have no where to put it. (are flat screens the latest??? You get the idea, right?)

The dream of owning a home, that 'ole "great American dream", was until very recently, a long-term dream. You bought a house, spent 30 some years paying for it and by the time you retired, if all went as planned, you actually owned your home and when your income necessarily dropped because of retirement, you had dispensed with the largest part of your monthly expense-your house payment. It all seemed to work out.

But something has changed with the next generation of homeowners. Owning a home is seen as a means of increasing income in the short term. It's like a shell game. Buy, sell, buy bigger, refinance, sell, buy yet bigger.

In an earlier post on this blog, my partner, Jodi, talks about when you should remodel a home. She is pretty stringent-telling folks that not until your kids' college fund is financed do you invest money in "the good life" by investing in a remodel. I thought Jodi was too stringent, now I think she was the harbinger of things to come-like the ghost of Christmases to come.

It is never wise, regardless of the market, to exhaust the equity in your home. Your home is literally your port-in-the-storm. There are obvious emergencies where taping into your home equity may be your only option and the point is, you want that option to be there if you need it.

This may be advice that comes far too late for many-but for the few---pay attention. Remodeling is a luxury, not a necessity. We need to get back to that mind-set and be content with analog rather than high def. (Well, as long as they'll let us anyway).

Smart Remodeling Caveats

Fitzpatrick-I agree with Peg’s previous post on almost all points, but there are some times when putting more money into a house than the neighborhood warrants actually pays off.

The first of these, Peg mentioned; when it’s your dream house and you don’t plan on leaving except feet first out the door. But even then, your heirs and/or caretakers might grumble if you’ve used all your equity to make it comfortable to the point of having no reserves for other things, such as home health care.

The second situation is when improvements will make a huge difference in your quality of life. For instance, if you install a pool and actually swim laps in it every day, thus improving your health and perhaps extending your life, or when you add a guest wing so an elderly relative can move in.

The third situation is one in which I and my husband find ourselves; buying into an older neighborhood that appears to be gentrifying. We’re in our 40’s and we’re the youngest folks on the block, our house was architect-designed, and it's within walking distance of one of the most desirable shopping hubs in town, which is undergoing its own gentrification. We walk to grocery, dry-cleaning, post office, bookstore and many fun clothing and coffee shops, high-end restaurants as well as cafes, and the only Whole Foods within 200 miles. There are very few houses for sale around here, and those tend to be snapped up by younger, hip professionals, even in this down market.

Interest in neighborhoods within walking distance of services is growing, and if you can find a house with architectural integrity in this type of locale, your remodeling investment may pay off. Not only in quality of life, but in actually bottom line net worth. We hope it will, anyway!

Smart Remodeling

Koontz - The housing industry on the West Coast is all abuzz of late as homebuyers watch their home values drop in a suddenly stagnant market. What does this mean to you if you are contemplating a remodel? It shouldn't necessarily stop your planning, but it should remind you to double-check your plans on your remodel. Are you investing your money in the right places for your home and your neighborhood?

We've talked about this before, but in down-turn markets it bears repeating. Unless this is the dream home that you never plan to leave, don't invest too much money in your remodel. You don't want to end up with the most expensive house in your neighborhood. Having the highest- end house in the neighborhood means you have a smaller field of buyers to choose from if and when you want to sell. As many sellers are finding out now, that is not the most desirable position to be in.

There were alot of people in the up-swing market who bought houses with the intention of upgrading them and flipping them. Much as my partner, Jodi, detests this industry, it's often a solid and lucrative endeavor. The trick though, whether you are remodeling to flip or you are remodeling for yourself, is to choose the right projects, i.e., those with the best return on your investment; and the right materials.

In our area, there was a great boom in the post-war housing neighborhoods during this up-swing. Sadly, the remodelers installed all the wrong, (and overly expensive), materials and destroyed much of the existing value of the houses they bought. Not only did they invest too much in their remodels/rehabs, but they made bad choices about what to improve. Post-war houses typically need upgrades like central heat and air conditioning, automated sprinklers, automated garage doors, additional square footage, (second baths especially), upgraded service panels and more electrical outlets, and for the way many of us live now; more open floor plans.

Instead, these flippers chose to replace tile with granite (WRONG!), put fancy front-doors on simple little porches, yikes; re-face exteriors with pseudo-fieldstone or new lace style dash coats, totally out of era; Replace solid wood kitchen cabinetry with new oak cabinets, (I swear if I never see another oak kitchen cabinet it will still be too soon); and generally, spend too much money on style rather than substance.

Now, when there's not a buying boom driving people to buy in a frantic market, buyers looks at these houses and recognize that they aren't worth the asking price, often because there is still too much investment on the new owners' plate to make the house a comfortable living space.

Whether you are remodeling for you or for the flip, pay attention to the details that make living in a space easier. That's kind of the point to remodeling!