Insight, one of our REALTOR® trade magazines had the following interesting tidbit;

From 1973 the square footage of houses built in the United States grew steadily – until last year when the size of the typical home shrank by 11 percent. “People are realizing ‘Hey, I don’t need the Lexus anymore’” says Wayne Elde of the Development Group, builder of the Terraces in Yuma, AZ. “I can live with the Camry.” About 90 percent of the homes that members of the National Association of Home Builders are building this year are smaller now than in decades.

If you think about it, you can certainly see this trend in Durham, especially in starter homes. In older neighborhoods, like Northgate Park and parts of Parkwood, the average home is a two bedroom with 1,000ish square ft. home, sometimes renovated later to three bedrooms. As we went into the Eighties, the starter home became 3 bedrooms and about 1,500 sf, like Villages of Cornwallis or the later parts of Parkwood. In the early part of this decade, that starter home started to have a fourth bedroom and was getting close to 2,000sf.

Will this trend towards smaller homes continue? How has the financial crisis changed your view of a “typical home?’

“I know prices are low and interest rates are great, but how will we come up with a 20% down payment?”

If I had a dime for every time I’ve heard that, I would be fairly wealthy. Apparently lenders are hearing it too, as they are starting to roll out plans that don’t require that large down payment. For example, Wells Fargo has their Community Development Mortgage Program [CDMP]. Under the CDMP buyers only need a 2% down payment to get to the closing table. For your average $135,000, you could be unpacking and rearranging the furniture in your new home for an initial investment of $3,000.

There are some requirements, but they are relatively minor;

• Owner-occupants only [no investment property]
• Minimum 620 FICO score
• No “bad marks” [late payments, foreclosure, repossession, etc.] on buyer’s credit score for the past 12 months.
• The interest rate will be slightly higher — perhaps a half-percent.

If you have been sitting on the fence waiting for the right moment to invest in a new home, this new mortgage plan might be just the thing to pull you off. If you would like more information, please email me and I’ll set you up with a Wells Fargo representative. The Federal tax credit ends on November 30, which is a lot closer than you think.

[edit: I forgot to add that there are some other requirements concerning income and the size of the home. For average buyers investing in a starter home, however, you should have no problems. You just can't buy the Biltmore with this.]

As some of you know, I used to own a game store in a prior career. Because of that, I am a sucker when it comes to books with a game gimmick. The Monopoly Guide to Real Estate by Carolyn Janik was a book tailor made to pull me in.

The biggest overall comment I can make about the book is that it is dense. There is just over 300 pages of material here with almost nothing to break it up — no diagrams, no illustrations, nothing. The Monopoly theme does, however, do a good job or organizing things in a more readable format. The book is divided into three sections; Getting In [buying], Getting Around [investment property] and Getting Out [selling] each of which deserves its own review.

Getting In is a solid overview of the buying process. It starts by explaining the many types of homes, and a bit of their history. From there it goes into mechanics — why you should look for in an agent, a home inspector, a mortgage broker and the other professionals you may run into. Follwing that is a good overview of the entire process from the opening offer to closing. By the time the reader is done with Getting In he should have a solid foundation to buy property even if he was a complete novice when he opened the book.

Unfortunately, the same can not be said of  Getting Around, which is doubly disappointing given the books subtitle – “Rules and Strategies for Profitable Investing.” This section has some really strong sections such as the section on REOs, some really weak sections, such as the section on “Leasure Time Property” [castles?!? gentleman farms?!?], and a couple of parts that are dangerously wrong. Two of the latter deserve particular note;

• The section on what to offer for a rehab property is dangerously flawed. following Ms. Janik’s advice would leave an investor dangerously susceptible to unpleasant, expensive surprises.
• I am simply stunned that a book published in 2009 would endorse the strategy of buying an investment property, rehabbing it to maximize its value, and then sucking out all the equity to buy more investment property. that is the kind of over-leveraging that, in part, got us into the housing crisis we now face.

Getting Out takes us back to solid ground with a good overview of the selling process. There is some excellent advice about staging and decluttering, suggestions on finding a good listing price, and a fair discussion about using a Realtor versus going it alone. It definitely ends the book on a good foot.

So, in short, The Monopoly Guide to Real Estate is a good book if you need to know how to buy or sell a home. If you wanted to learn how to invest in real estate, I would strongly suggest another book

LEGO repairs in Amsterdam

Every major city has its downtown buildings that are starting to show their age — chipped bricks, missing mortar and so on. What most cities don’t have is Jan Vormann. With a group of volunteers, Jan recently went through Amsterdam and fixed up those crumbling buildings with more permanent LEGO bricks.

For more details of Jan’s trip through Amsterdam, take a look at his website.

[Picture is from Jan's website. Also, a hat tip to Geekdad for calling it to our attention]

Looking for something to do to celebrate our nation’s Independence Day? Here are a few ideas

As always the biggest event of the weekend is the Festival For the Eno. The festival runs all weekend, and features over 80 performers on 4 separate stages. Plus it ends at 6PM, so you would still have time to make the fireworks!

Durham’s fireworks celebration will be in the American Tobacco complex. There will be live music starting at 5:30, a baseball game at the DBAP starting at 6:50 [the USA National Team vs. Guatemala] and fireworks after the game — probably around 9PM. Admission to the stadium will be free after the 7th inning stretch [around 7:30]

Chapel Hill’s fireworks will go off at Kenan stadium on UNC’s campus. The stadium gates will open at 7PM with live entertainment until the fireworks start at 9:30PM. Admission is free.

Have fun this evening, and remember what we are celebrating.

Last month’s housing data showed a strong increase in the health of the
Durham housing market. Will the numbers for June hang on to those gains? Let’s
take a look.

For all of Durham County there were 2046 houses listed at the end of June. 328
sales closed in June, so at that pace the currently available inventory would be
sold in 6.2 months. This is an  improvement of 2.1 months building
on May’s improvement of 3.5 months. In fact, this would almost make Durham
County a seller’s market if that strength held up for any length of time.

For the 27713 area code there were 427 homes listed at the end of
June. 108 homes sold during June, so the current listings would be sold through
in just under four months. This is another significant improvement from
last month and a marked improvement from Aprils 12 month absorption rate.

Like last month, these improvements are largely driven by increases in the
number of homes that are sold without a similar increase in the number of listed
homes. Still, two months of solid sales in both the county as a whole and in
south Durham can lead one to believe that our market is recovering.

Let’s take a look at some individual communities

All of these communities showed strong improvements over last month’s
numbers, and currently appear to be in a seller’s market — most of them
for the second month in a row.