U r b a n T r e k k e r

2006: Year of The Dog

2006 is the Year of the Dog (Fire Dog that is!), according to the Chinese astrology. The year of Dog Brings Baby Boom.

"A baby boom is expected next year, The Year of the Dog according to the lunar Calender, meaning there should be huge demand for nurses who look after children during the first month after deliver, or yuezi ayi as they are known in Chinese. The expected baby boom is the result of an ancient Chinese superstition. Many people in the country believe zodiac signs can affect a child's personality, so they prefer to have children in the years of the tiger, monkey and dog."

OK, that's in China. In the U.S. during the year 2005, we saw the market transitiioning from hot, hot sellers market into a more calm and balanced market.. yogi like market. Sellers' new slogan for 2006, "Buyers: We Want You!"

While bubble related blogs are popular now, I don't believe that housing market is going to disappear anytime soon. That's for sure. People still need shelter. It's one of the necessities in life. People are still coming to Metropolitan Washington DC, because it is not only the place where most of the federal dolllars are spent but also one of the gateways for new comers, including immigrants.

Here is what I think (IMHO) are the 8 Things to watch in 2006 on the home front:

• Mortgage interest deductions. It's the deduction you get when you pay your mortgage. When Congress is back on session next year, the M-I-D will be one of the items to eliminate in a way to decrease federal budget.
• Energy-efficient homes. When customers see their heating bills increased by 20%+ this winter, it will make them appreciate the things around the house that can help them save money on their heating bills.
• Dog houses makeover. In the hot housing market, buyers would pay high prices even for not-so-well-maintained homes. In dog year, dog house hunters wouldn't come close sniffing, unless it's been undergone some makeover. Repaint. De-clutter.
  
• Health concious, living well style. More people are paying more attention to green-building, living using natural products and other green products. Feng Shui goes mainstream.
  
• Next wave of kitchen appliances. Beyond stainless steel appliances will be making their way in next year. Bronze appliances, anyone?
• Exotic loans replace by more traditional loans. With all the bad raps about exotic loans, it looks like consumers would rather take more traditional loans like fixed rates or ARMs.
• Smart growth. Mixed-use development that take advantage of smaller parcel of land in exchange for increase density to create walkable neighborhoods will remain popular. Town centers for live/work life style. Developments around VRE stations. Developments close to Metro stations.
• Seller's incentives. The long gone (at least for four years!) incentives are back. You will see that sellers help with closing costs that were unheard of in the hot market will be back as part of the home purchase deal. In a slow market, lease option will be an alternative to sell the property.

Best of All...Happy "Woof" Year!

* U.S. Growth May Hinge on Businesses [NYT]
* Snow: Raise Debt Limit [Calculated Risk]
* Housing: Exotic Loans, Regulations and Foreclosures [Calculated Risk]
* Beyond Stainless, New Kitchen Appliances [Real Estate Journal]
* Walmart Attempts of Going Green [Natural Home and Garden]
* As the Year Approaches, Some Predictions for Local Real Estate [Washington Post]
* Clean up the Clutter, Price the House Right [Washington Home Guide]

Image: Locketown Chinese Horoscope.

Real Estate Links

Closing day of the year 2005. Here are selected stories from around the Web on real estate:

Appraising a Shifting Market [Washington Post]
Chevy Houses Cute Even Without A Car [Washington Post]
Ye Olde Starbucks [Planetizen]
America's New Suburbs: Aging Industrial Cities [Planetizen]
Traditional Update [Remodeling Online]
From Abandoned Industrial Village to Cool University Village [CoolTown Studios]
Marriott Sells Off Land Courtyard Package [Washington BizJournal]
Freddie and Fannie Got Good Fiscal Health Report [Washington BizJournal]
Worst Case Scenario for Housing Next Year [Inman News]
Prices Up In Spite of Slow Down [Washington Home Guide]
Clean Up the Clutter, Price the House Right [Washington Home Guide]

That's it for this year :)

The Affordability Factor

This is so true that housing affordability level is so low it caused many potential buyers to either simply move to a completely new area or further away from their place of work.

According to USA Today in search of affordable homes forced young people to move away from the hip and trendy urban cities to the burbs or to the less glamourous cities.

Young, single people usually love the excitement of big cities, from the vibrant nightlife to the noisiness and frenzied pace of urban existence. They love it so much they're willing to pay a stiff price for cramped quarters and communal living.

The affordability also caused population shifts. People moved away from the coastal states, like California and New York to other cities in the West or South. The population shifts will definitely have an impact on congressional races and policy.

Some other important data from USA Today:

• NY lost people for the first time since 1980.
• If the pattern continues, Florida will overtake NY as the third most populous state by 2010.
  
• California is not the top state's gainer.
  
• Virginia is the beneficiary of the population shifts. It gained more 86,000+ people than the nine Northeastern states combined (59,000+).

If Virginia gained more people than the other nine Northeastern states combined, wonder why are we concern so much about market bubble then.

* More of the Young and Hip Fight Urban Urge [USA Today]
* People Fleeing Costly Coastal States for South, West [USA Today]
* In Search of Affordable Housing People are Fleeing the Coast [Matrix]
* Housing Affordability Hits 14-Year Low [Real Estate Journal]
* In the City Center where the Action is [CoolTown Studios]

Real Estate Links

I'm back. The schedule of arrival got pushed back a day! It's nice to escape the routine for a couple of days.. and spent some time with family.

Here are a few selected stories from around the Web on the home front..some are from a couple of days old, but still relevant information:

* Developer Buys Blue Castle in Southeast [Washington Post]
A Realty company is said to pay $20M for this building ideal for future Wholefoods?
* Finally Spring for Haymount [Washington Post]
4,000 New environmentally conscious homes to be built on the Rappahanock River outside Fredericksburg, VA.
* Land Sale Possible to Fund Stadium [Washington Post]
DC Officials are considering to sell development rights on land adjacent to baseball stadium to fund the stadium.
* The Price a Buyer is Willing to Pay is Not Always Market Value [Matrix]
This is where real estate agents and appraisals are sometimes can't agree.
* Lower Gas Prices Fuel Housing Optimism [Matrix]
According to Gallup Poll investors optimism surged in December with lower gas prices.
* Existing Home Sales Slow, Inventory Highest Since '86 [USAToday]
The latest snapshot of home sales activity in November from the National Association of Realtors.
* Combining Green Building with Urbanism [CoolTown Studios]
It's about creating walkable energy-efficient community.
* Robert Redford Ultra Green Building [CoolTown Studios]
The national model feature for green building.

Happy Holidays

Wishing You a Very Happy Holiday to all of You!

It's time for real estate break. I will be taking it easy for the next couple of days. Relax. Traveling. Eat. Enjoy holidays. I will try to blog from the road...yeah, right! I will be back on Thursday with fresh information from the home front.

Capitol Hill Tower

Hats off to JD with Near Southeast DC Revitalization blog. She has followed the development from start to almost finish on this project complete with pictures. Here's a snippet:

I've got a tidbit or two on the Capitol Hill Tower project, as it heads toward the finish line. The Courtyard by Marriott hotel that makes up the southern portion of the block is anticipating an opening date of March, 2006

Check it out yourself.

November New Home Sales

More negative news for the housing market. The Census Bureau just released their score card for November new home sales. Sales were down by 11.3% from a month before. Now, the new home sales is not a leading indicator, according to Matrix.

Big Picture summarized it well.

I expect New Home Sales today to be flat to negative  -- consensus is -8%, or 1,300,000 annualized.

Because of the limitations in the data gathering -- its a very small sample, with a large statistical error -- we could just throw out the November data.

Instead, lets think of it in terms of reporting the two months together, and then averaging them. A plus 13% and a minus 8% gives us about a ~5% growth rate in New Home Sales, which seems about right . . .

Isn't it the real growth that we're more interested?

* The Census Bureau New Residential Sales November 2005 [PDF File]
* New Home Sales and Housing Starts Permit [The Big Picture]
* Builders Build, New Home Sales are Not Leading Indicator [Matrix]

Meridian Apartments Going Condo

Crossposting with New Home Trekker. About a few months ago, I posted information about hotel and condos coming to Courthouse corridor. This is a follow-up to the story.

Monument Realty of D.C. bought a 256-unit apartment complex called the Meridian III at Courthouse Commons in Arlington and plans to turn it into condominiums.

These condos will be coming on to the market sometime early 2006. I don't know exactly when early next year that will be. Hopefully, I can get the information for you when I visited the sales office sometime this week for a different purpose.

Only the phase III that will go condo mondo. The other Meridian apartments, will stay as rentals. With only two blocks from Courthouse Metro station and being on the orange line hotspots, it will be exciting to watch how the sales goes in the already crowded condo market. If the price is right, I assume that these condos will sell like hot cakes!

* Meridian Apartments Conversion

New Way to Fund Dulles Rail?

A follow-up on Dulles Rail Project. According to the Washington Post, the Airport Authority decided to make a move to take over the Dulles Toll Road in order to speedy up the Dulles rail project.

The authority that controls Dulles International Airport made a move yesterday to take over the state-run Dulles Toll Road and seize control of construction of a rail line to the airport, hoping to ensure that the troubled project moves forward.

As owner of the land on which the toll road is built and much of the rail line would reside, the Metropolitan Washington Airports Authority could stop efforts underway to privatize the highway if its proposal is rejected. Because of the authority's clout, the proposal carries enormous consequences for one of the biggest rail projects in the nation and promises higher tolls on one of the most heavily used commuter routes in the region.

This proposal sounds too good to be true. There still financing details not in which they're not even sure how they're going to fund it.

* Airports Authority Dulles Rail Project [Washington Post]

Real Estate Links

Here are selected news from around the Web on real estate:

Baltimore Rides a Tide of Rising Property Values [Real Estate Journal]
Housing Starts Rise 5.3% In November [Washington Post]
Where the Affordable Homes are [MSN]
The Wealthy Thinks their House Values will Rise [Matrix]
Mirant Plant Directed at Further Reopenting [Washington Post]
After the Housing Runup [Business Week]
Wall St. vs Main St. [Inman News]
This is a Restaurant? [CoolTown Studios]
Who Wins -- Who Loses, when the Feds Raises Rates [Realty Times]