April 29, 2015

Mirco Units Provide a Small, but Affordable, Option

In major urban U.S. cities such as Seattle, New York City, Boston, San Francisco, and Washington, D.C., apartment unit sizes have been decreasing as developers seek higher density and revenue per square foot to compensate for increased land value and construction expenses. These "micro-units" are typically studios or one bedroom apartments with full kitchens and bathrooms and lease for 20 to 30 percent lower per month than conventional units yet have high value ratios (rent-per-square-foot). The size of such units varies according to city-specific size requirements for new dwelling units, but typically ranges from 280 square feet to 450 square feet, often falling between the sizes of a one and two car garage. 

The first prefabricated micro housing project in the U.S., SmartSpace SoMA (shown below), was built in San Francisco in 2013. Its 23 units are just smaller than 300 square feet each and feature dining tables that convert into beds. 

Micro units have preformed well when compared to conventional units, achieving higher occupancy rates and rent-per-square-foot. According to 2014 consumer research conducted by the Urban Land Institute, nearly a quarter of renters in traditional apartments would be interested or very interested in renting a micro unit.  However, real estate analysts have yet to determine if micro units characterize a large, relatively untapped market or is simply a niche market. The popularity of these units could be attributed to their relative scarcity as opposed to unmet demand - only time will tell. 

April 22, 2015

Buckeye Lake's New Dam Puts Summer on Hold

A recent article in The Columbus Dispatch reports that the state will soon replace Buckeye Lake's dam, keeping the reservoir's water level low, which will prohibit boating, for the duration of the project. The estimated $150 million project will take about five years.

While the replaced dam is necessary for structural and safety purposes, the project is concerning for many reasons. Local businesses that depend on seasonal recreation such as the Buckeye Lake Winery, to the left, will likely suffer from decreased business. Many of Buckeye Lake's attractions (including its Yacht Club, above, and restaurants such as Captain Woody's and Papa Boo's) can be reached by boat. The project will also hurt residents, who will not be able to use the lake for the duration of the project or experience the lake view they've grown accustomed to. Not to mention, Buckeye Lake residents who were hoping to sell their home any time soon will be hard-pressed to find a buyer at this time.

Buckeye Lake, renamed from Licking Summit Reservoir, was declared a public park in 1894. How did it end up in this position? In the early 1900s, Ohio's Board of Public Works sold the land excavated to use in building the dam and leased the land occupied by the the backside of the dam for private development. At this time, the area was mostly farmland, as it no longer served as a feeder lake for the Ohio and Erie Canal. Buckeye Lake soared in popularity when an electric interurban railway system began taking vacationers there. Even through the railway went out of business in 1930, Buckeye Lake was in good shape: it had an amusement park (see image below) complete with a beach, arcade, bathhouse, and two dance pavilions.

In the last 1950s, the Chief of Parks V.W. Flickinger declared that the occupied lands by the back half of the Buckeye Lake Dam were "no longer needed for public recreation, parking areas, roads and highways, or other projects of a public nature." This so-called property surplus was subsequently divided into 77 lots in the 1960s, by which time the amusement park was falling into disrepair. A sidewalk along the dam's crest separated private from state property; however, residents paid little attention to this boundary and built patios, decks and docks as they pleased without facing repercussion. While drawings had to be submitted to the parks office for approval, many residents came in with modest drawings and proceeded to build much larger scale projects. Some residents feel that the state is to blame for selling the property rights in the first place, while the states blames the residents for encroaching upon the dam.

Currently, 370 homes sit atop the 4.1 mile dam. Michael Spoor states that Buckeye Lake is "without precedent" in the number of man-made encroachments compromising its structure. Spoor has studied dams for the U.S Army Corps of Engineers for over 40 years. The Corps claims that the man-made impediments are the most significant source of the dam's many defects, and now its current residents will have to pay the price as they wait patiently to get their summers back.

For those interested in owning a house on the water, consider buying a property on Indian Lake (below) in Logan County (Western Ohio). Widely used for recreational activities such as fishing and boating, the  area is also known for its wildlife and walking trails. Check out my current listing on Indian Lake: a two bedroom, two bathroom condo that's furnished and move-in ready! The 2nd level, end-unit condo has a new hot water tank, carpeting, decking, and HVAC. It's eligible for a 0% down USDA home loan, and comes with an assigned boat slip! Contact me to learn more.

April 15, 2015

The Story Behind Disney's Movie "Up"

Disney's movie Up is rumored to be based on the real-life story of Edith Masefield, who lived in a modest Seattle home. For sentimental reasons, Edith refused to sell her home to developers, even when offered nearly $1,000,000 despite the home and land's value of $128,000. The construction cheif of the neighboring high-rise, Barry Martin, befriended Masefield upon hearing her story, and cared for her when she was diagnosed with cancer. Upon her death in 2008, Edith left her home to Barry, who published a book ("Under One Roof") on what he had learned from her.  The house has since been sold to a local company known for motivational seminars, which plans to elevate the home to the top floor of its office building. Below is Edith's home. Read more of Edith's story. 

In Herriman, Utah, the home from Up was recreated by Bangerter Homes with Disney's permission in time for the Salt Lake Parade of Homes this past August. View photos here!

The House in Up
Bangerter Homes' Recreation

April 8, 2015

Housing's Supply Problem Exposed

You may already know that the current residential real estate market is suffering from a lack of supply. But just how serious is this issue, and what's causing it?

According to a recent CNBC article, The National Association of Realtors reported that the housing market was still underperforming in February. There are currently just less than 1.9 million homes for sale, which is less than last year and "well below current demand." Whereas the number of listings typically increases by 6 percent from January to February, the number of listings this year increased by less than 2 percent. Even foreclosures are down, reaching their lowest level last month in 8.5 years. Lack of supply results in increased prices: prices have risen 7.5 percent year over year, as the median home sale price as of Feburary was $202,600. Lawrence Yun, Chief Economist for the Realtors, considers these price gains "unhealthy." So, what's behind this persistently low supply?
  • Larger builders are gaining share over smaller builders, who don't have access to credit. Larger builders tend to cater more to higher-end buyers, not first-time homeowners, pricing this key demographic out of the market.
  • Relatedly, many people are choosing to rent instead of buy. For this reason, rental prices have increased sustainability and show no signs of stopping. In turn, renters are struggling to save enough money for a down payment.
  • Buyers are low on cash and are highly concerned with value following the recession. They want to feel as if they are getting a good deal, which is hard to do in light of increasing prices and fewer housing options. 
Peter Boockvar, managing director and Chief Market Analysis of The Lindsey Group, states that household growth and even higher rental rates will cause a nice rebound in the housing market, reaffirming that a slowdown in the pace of home price gains is much needed.

Now is a good time to sell, as sellers can take advantage of the recent price increases caused by the limited supply of listings. Visit my website and contact me to see how I can help. I am a full time Realtor with a lifetime of experience serving sellers (and buyers!) in Ohio.