Skinny homes are built for any number of reasons. It could be space constrictions, tax or code restrictions, the creative muse, or even for the vengeful-minded to grind an axe with a family member.

What does it mean to say a house is skinny? You know you’re in one if you can stand in the center of the room and touch opposing walls. Alas, many New Yorkers can identify, and the following homes are all in cities where space is at a premium.

The Dutch may be more familiar with the phenomenon. Take the example of the tall and slender traditional Dutch homes of Amsterdam pictured here. Amsterdam is rife with them because at one time there was a tax on the width of residences. The staircases of such structures are so narrow and steep they’re practically ladders, which made furniture installation and removal an issue. Hence, the narrow homes of Amsterdam also come with hooks at the top, so homeowners could hoist furniture up and down and through the windows.

Narrow Mist, a traveling art project by Austrian artist Erwin Wurm (pictured here in Venice) is modeled after the house he grew up in, only it has lost most of its width on a diet. The interior has narrow furniture, narrow bookshelves, a narrow landline telephone, narrow toilet and bathtub, and narrow rooms papered in 1970s patterns. Interior images can be found on the Design Boom website .

The oblong structure plugging up an alley resembles a giant version of several different personal items, but it’s a building called Ermitaz, or Ermitage — designed by Jakub Szczesny to be a hermitage for Israeli writer Etgar Karet. At a maximum width of four feet wide and 28 inches at its narrowest, it’s the skinniest house in Poland and maybe even the world. However, because the structure doesn’t conform to Polish building code the Centrala website calls it an “art installation in crack between the buildings” (or as we like to call a building crack, an “alley”).

This architecturally modern home overlooks the Puget Sound. While not much wider than the single-car garage it’s built over, the wall of windows facing the view help it feel spacious. It has flooring of cork, slate, concrete, ceramic tile and bamboo; an elevator in which to ascend to the roof deck, which has a stainless steel gas fireplace; custom lighting, and is wired for TV and Internet.

April 25, 2011

Falling home prices should give aspiring homeowners the upper hand this Spring, but in a growing number of locations, it doesn’t feel like a buyer’s market.

Blame the nearly five-year slide of home prices. Those declines, which accelerated over the past two quarters, have left many sellers unable or unwilling to lower their prices. Meanwhile, buyers remain gun shy about agreeing to any purchase without getting a deep discount.

That dynamic has fueled buyers’ appetites for bank-owned foreclosures. Those homes often hit the market at bargain prices, but they are being snapped up by investors who are paying in cash.

At a focus group earlier this month, the mood among buyers was “nasty,” says Glenn Kelman, chief executive of Redfin Corp., a Seattle-based brokerage that operates in nine states. “There’s a shortage of attractive inventory,” he says. “Customers just keep getting outbid on the houses that they want.”

It took Susan Hunter just one month to unload her home in Redondo Beach, Calif., last fall. But she has been outbid on four homes at a lower price point in Eagle Rock, an emerging neighborhood in northeast Los Angeles. Some sold to investors who paid cash. Other listings, she says, are being resold by investors at prices that she says are too high.

“It’s the Wild West out here. It’s a daily, tireless search,” says Ms. Hunter, who works in television production and marketing. Demand is up because “we haven’t been able to find homes here below $500,000 since the 1990s.”

Last year, software engineer Young Hammack gave up looking to buy after being outbid on three properties. This year, he has his eye on a four-bedroom foreclosed house with a pool in Citrus Heights, Calif., that hasn’t yet hit the market. He hopes to pay about half the $492,000 it fetched six years ago.

But the 32-year-old, who is relying on a 3.5% down-payment mortgage backed by the government, is at a disadvantage against buyers who can pay cash. “It’s a false buyer’s market,” he says. “If you think prices are cheap, wait until you start putting offers in.”

Many buyers are looking for discounts because they lack confidence that prices have reached a bottom, and sellers won’t have much pricing power as long as buyers such as Mr. Hammack and Ms. Hunter are in no hurry. “It may take some time, but I’m willing to wait,” Ms. Hunter says.

The Wall Street Journal’s quarterly survey of housing-market conditions in 28 major metro areas shows inventories of unsold homes remain high but fell during the first quarter. Listings were down by nearly 25% from one year ago in Miami and Orlando, and by 12% in Phoenix and Portland, Ore., according to figures compiled by John Burns Real Estate Consulting.

Other markets, including New York’s Long Island and Charlotte, N.C., still face imbalances. At the current sales pace, it would take more than 16 months to sell all homes listed for sale in each market. A balanced market typically has a six-month supply.

Meanwhile, home values fell in every metro area for the second straight quarter, according to data from Zillow Inc. Prices were down by more than 5% in Chicago and Detroit, the largest quarterly drops, to levels not seen in more than a decade.

Values have fallen so far that many sellers with equity aren’t willing to drop their prices. Those without equity can’t cut the prices unless the bank agrees to take a loss in what is known as a short sale. Such sales can take months to complete and fall through at the last minute, deterring some buyers. Still, short sales hit a new high, accounting for 9% of all transactions in January, according to CoreLogic Inc.

“Frankly, until we start building some equity, the market is just going to sit here and do pretty much nothing for the next few years,” says Christopher Thornberg, a housing economist at Beacon Economics in Los Angeles.

Homes that don’t need much repair work and that are located in choice neighborhoods near transit hubs or with good schools are in demand. “What’s selling is the cream of the crop, and they sell fast,” says Steve Capen, a real-estate agent with Keller Williams Realty in St. Petersburg, Fla. “If it’s not cream of the crop, it’s getting hammered.”

Mike Morea and his family have outgrown the 800-square-foot, two-bedroom home he bought eight years ago in Seminole, Fla. He hopes the bank will approve a short sale for about $85,000 for a $50,000 loss. In December, Mr. Morea saw first-hand why buyers are more attracted to foreclosures: he bought one for himself, a $200,000 three-bedroom home in a nicer neighborhood 10 minutes away.

“That’s what every seller is running into,” says the 31-year-old police officer. “Nobody is going to buy your home at retail price if there are 30 foreclosures available.”

While foreclosures are in demand, mortgage companies’ processing problems have sharply curtailed the flow of bank-owned properties onto the market in states such as Florida, New Jersey and New York, where courts must process foreclosures.

To be sure, some of the challenges facing the housing market are easing as the economy adds jobs, boosting demand and easing mortgage delinquencies.Depressed prices coupled with low interest rates have made housing more affordable than at any time since 1975, according to Zillow.

But the legacy of the housing market’s collapse has left two big structural problems. First, the huge erosion in homeowners’ equity has deprived housing markets of the all-important “trade up” buyer. Even those with equity often aren’t willing to sell at current market prices, exacerbating what housing analyst Ivy Zelman calls the “stuck factor.”

Second, foreclosures are still weighing on housing markets. While mortgage delinquencies are down from their 2009 peak, an all-time high of 2.2 million loans were in foreclosure at the end of March, according to LPS Applied Analytics.

Economists say the “shadow inventory” of another 4 million potential foreclosures will keep a lid on prices for years. Even in markets with rising demand and falling inventory, prices won’t go up because “there’s too much on the horizon, so nobody’s in a hurry,” says Ron Leis, a broker in Sacramento, Calif.

Tighter credit standards have also left markets with fewer buyers at a time when more would help. When he needed to move into a bigger home four years ago, Todd Loewenstein sold his Redondo Beach home and began renting. “Now, we want to get back in, but it hasn’t happened,” says the 44-year-old technology entrepreneur.

He fell out of escrow one week before closing on an $850,000, three-bedroom home in October after the lender turned down his loan. Mr. Loewenstein, who was prepared to make a 20% down payment, says he has never missed a payment in his life and has enough savings to last several years.

But he wasn’t able to meet the bank’s tight income-documentation requirements. The home, which sold for $1.25 million in 2005, is still on the market. Mr. Loewenstein says he scans listings every day and is still looking to buy.

Roughly 112 metro areas in the U.S. are still dealing with 10% unemployment or greater. That’s down from 166 at the same time last year, but tell that to folks in El Centro, Calif., where nearly one in every four people is unemployed. The Riverside-San Bernardino-Ontario area in California is still dealing with nearly 14% unemployment, while the 13.3% unemployment in Las Vegas is not only driving up foreclosures, but driving down traffic to its McCarran airport. Passenger numbers fell off 2.6% last year.

On the other side of the recovery, more than 210 cities are below the average U.S. rate and 65 areas dipped below 7%. If you’ve got a sweet gig at the University of Nebraska or have a steady buyer for your grain or corn-based ethanol, count yourself among the lucky residents of Lincoln, Neb., who aren’t part of the city’s absurdly low 4.1% unemployment rate. That’s still up from 3% just two years ago, however, and is only a hair better than the 4.2% rate in Bismarck, N.D.

It takes more than just a low unemployment rate in a small town to show the world you’ve weathered years of recession-fueled financial woes. With help from the Census Department, the Bureau of Labor Statistics and the Bureau of Economic Analysis, TheStreet found U.S. cities that not only withstood the economic downturn, but seemingly ignored it:

Austin, Texas

Reported GDP in 2009: $73 billion
Reported GDP today: $78.4 billion
Unemployment: 6.8%
Population change 2000-10: 20.4%

The locals want to keep Austin weird, and having a glut of jobs and a growing city definitely qualifies as weird during a period of financial turmoil. Heavy hitters such as Dell, the University of Texas, Whole Foods and Forestar Group have helped by doling out jobs, and newcomers such as Samsung have added to the city’s work force. But a town that’s staked its reputation on art-and-music-fueled funkiness seems to expand every time the South By Southwest music, technology and movie festival rolls through.

Washington, D.C.

Reported GDP in 2009: $366.6 billion
Reported GDP today: $407.5 billion
Unemployment: 5.8%
Population change 2000-10: 2.8%

With government jobs, lobbying and contracting gigs linked to those government jobs, a huge law community, a heavy tourist draw and the bolstering presence of universities such as Georgetown, George Washington, Howard and American and companies including Danaher and Pepco Holdings, D.C. and its surrounding areas were doing just fine before the recession. When the government decided the best way to upend that recession was to beat it over the head with money until it went away, that certainly didn’t hurt the city’s cause.

Augusta, Ga.

Reported GDP in 2009: $17 billion
Reported GDP today: $18.4 billion
Unemployment: 8.4%
Population change 2000-10: 0.3%

It’s not all of the sun-baked fellows in the galleries yelling “It’s in the hole” at the Masters Tournament or the tourists getting a taste of the city’s powerfully hot summers that have kept the city growing and its unemployment numbers on the wane since 2009. Instead, Augusta steeled itself against the recession in the best way a city can — by building its economy around a recession-proof industry. In Augusta’s case, the medical, biotech and military communities provided a stable base as the rest of Georgia crashed. The state’s unemployment mark still sits at 9.8%, above the national average, but a large medical community and an Army Signal Corps facility allowed Augusta to keep its cool.

Madison, Wis.

Reported GDP in 2009: $31.2 billion
Reported GDP today: $34.8 billion
Unemployment: 5.7%
Population change 2000-10: 11.6%

If that 5.7% unemployment rate looks enticing, you should have been in Madison during the recession in 2009, when unemployment was at 3.5%. That’s not a headline from The Onion, either, as the University of Wisconsin, the state government (protests and all) and the surrounding medical and biotech communities have largely shielded Madison from the recession’s effects. Companies such as Spectrum Brands seem fairly happy here as well, which has created a business base that makes Wisconsin grads slightly more inclined to stay.

Boulder, Colo.

Reported GDP in 2009: $16.2 billion
Reported GDP today: $17.6 billion
Unemployment: 6.9%
Population change 2000-10: 5.8%

The University of Colorado gets all the credit for keeping jobs around but, like Austin, Boulder’s hippie roots and artistic bent do a nice job of keeping the foot traffic moving and keeping the place just a little quirky. This helps spice up the job mix a bit by placing ad firm Crispin Porter + Bogusky, Celestial Seasonings tea and plastic sandal maker Crocs to the list of employers, but the area still relies heavily on scientific institutions such as the Center For Astrophysics and Space Astronomy, the National Oceanic and Atmospheric Administration and the Space Science Institute, as well as straitlaced companies including IBM, Lockheed Martin and Ball Aerospace & Technologies to keep the party going.

by: Shanda Novak

A failed downtown-area condominium project could be revived as apartments, and a fast-food restaurant could give way to a boutique hotel-condominium project, as developers move to take advantage of Austin’s strengthening economy and an improved climate for construction financing.

Crescent Resources is evaluating whether to revive its former Aquaterra condominium project at 210 Barton Springs Road, as apartments, albeit under a different name, said Scott Makee, regional director for Texas and Tennessee for Crescent.

Makee said Friday that it was too early to speculate about the future of the site but noted, “Crescent is excited about the Austin multifamily market, which is experiencing rising rents, limited supply and shrinking vacancies.”

At Lamar Boulevard and Riverside Drive, California-based Post Investment Group is looking at the possibility of building a six-story boutique hotel with about 150 rooms. The 1.15-acre site is now occupied by a Taco Cabana, whose lease expires in February 2012, Post said.

Preliminary plans for the $40 million project also call for 12 condominiums on the hotel’s top floors, with units priced in the $600,000 to $700,000 range, said Jason Post, president of Post, which acquires and develops multifamily properties around the country.

Post said his company is in discussions with several hotel brands about the project, which would have a rooftop pool, a restaurant and bar and other amenities.

If Post can’t get financing for a hotel, the company would build an apartment building with 120 units or a condo building with 110 units.

“We’ll do something for sure,” said Post, whose company bought the site Jan. 31 for an undisclosed price.

Several developers also are looking at a site at West Seventh and Rio Grande streets, where CLB Partners once planned the 34-story 7Rio condominium tower.

Dallas-based CLB shelved the project in 2007, and Will Cureton, a CLB founder and partner, said his firm dropped its long-term option on the land in December.

However, he said, the company is scouting sites for apartment projects in the downtown area and “absolutely” would consider the site again.

Other developers also have expressed interest in the tract, although landowner Mike McGinnis declined to comment.

“The apartment market is recovering very nicely,” Cureton said. “Demand for apartments and rents have risen substantially.”

On the financing front, he said: “The institutional investor is much more interested in investing in Austin than it was six months ago. And the private equity firms are also very interested in what’s happening in Austin, Texas.”

In the case of Aquaterra, Crescent already has entitlements for the site and would not need to go through a new zoning process.

Aquaterra, announced in 2006, was designed to be 19 stories high, with 173 units. But Crescent shelved the project during the recession.

Brett Rhode, an Austin architect who designed the original project, said the project is being reconfigured for apartments.

“The atmosphere is much more positive now than even a few months ago in terms of moving forward with projects in the downtown area,” said Rhode, principal with Rhode Partners. “It’s likely we will see some of our stalled projects come back to life, giving us a chance to rethink and improve our designs.”

Charles Heimsath, an Austin real estate consultant who has done preliminary consulting on both the Crescent and Post projects, said that in the current economy, it is “very unlikely” a developer could get financing for a downtown condominium project.

Switching to apartments would be “an obvious choice” for developers who own sites that already have entitlements, he said.

The American-Statesman reported in March about another potential project. Riverside Resources, an Austin-based investment and development company, had put the former Whitley Printing Co. site at Third and Brazos streets downtown under contract for a possible apartment project, although the company said it was leaving all options open.

Greg Miller, vice president of CWS Capital Partners, an Austin-based real estate investment company, said, “I think capital is interested in Austin again, and particularly in the urban environment, so a lot of developers are either looking for development opportunities or dusting off old plans.

“Since the beginning of the year, the capital markets have loosened up, and the apartment fundamentals have gotten better,” he said.

Locally, job growth, newcomers moving to town and scant new apartment construction are combining to drive apartment rents up.

Earlier this year, Greg Willett, vice president of research for MPF Research, which tracks the apartment market, said rents began rising in the second half of 2010 and will continue climbing for the next two years,

“If you had to pick a half-dozen markets that are on everyone’s radar list, Austin is one of them. Everybody wants to buy or build something in Austin because the outlook is strong,” Willett said.

For Forbes’ list of the best cities for jobs, we ranked all 398 current metropolitan statistical areas, based on employment data from the Bureau of Labor Statistics reported from November 1999 to January 2011. Rankings are based on recent growth trends, mid-term growth and long-term growth and momentum. We also broke down rankings by size — small, medium and large — since regional economies differ markedly due to their scale.

Reflecting the importance of the war effort in stimulating local economies, command of this year’s best place for jobs was handed to the Army from the Marines. Killeen-Temple-Fort Hood, Texas, shot up to No. 1 from No. 4, while Jacksonville, N.C., last year’s first-place winner and home to Camp Lejeune, dropped to 19th place.

Once again the best places for jobs tended to be smaller communities where incremental improvements can have a relatively large impact. Eighteen of the top 20 cities on our list were either small (under 150,000 nonfarm jobs) or mid-sized areas (less than 450,000 jobs).

But no place displayed more vibrancy than Texas. The Lone Star State dominated the three size categories, with the No. 1 mid-sized city, El Paso (No. 3 overall, up 22 places from last year) and No.1 large metropolitan area Austin (No. 6 overall), joining Killeen-Temple-Fort Hood (the No. 1 small city) atop their respective lists.

Texas also produced three other of the top 10 smallest regions, including energy-dominated No. 4 Midland, which gained 41 places overall, and No. 10 Odessa, whose economy jumped a remarkable 57 places. It also added two other mid-size cities to its belt: No. 2 Corpus Christi and No. 4 McAllen-Edinburgh-Mission.

Whatever they are drinking in Texas, other states may want to imbibe. California — which boasted zero regions in the top 150 — is a prime example. Indeed, a group of California officials, led by Lt. Gov. Gavin Newsom, recently trekked to the Lone Star State to learn possible lessons about what drives job creation. Gov. Jerry Brown and others in California’s hierarchy may not be ready to listen, despite the fact that the city Brown formerly ran, Oakland, ranked absolute last, No. 65, among the big metros in our survey, two places behind perennial also-ran No. 63 Detroit-Livonia-Dearborn, Mich.

One lesson that green-centric California may have trouble learning is that, however attractive the long-term promise of alternative energy, fossil fuels pay the bills and create strong economies, at least for now. Even outside of Texas, oil capitals did well across the board, not surprising given the surging price of gas. Our No. 2 small metro, Bismarck, N.D., which also No. 2 overall, is the emerging capital of the expanding Dakota energy belt. Also faring well are Alaska’s two oil-fire cities, Fairbanks (No. 10 on our small list) and Anchorage (No. 3 on the medium-sized list).

There were some intriguing surprises as well. Most welcome are signs of revival from New Orleans-Metarie, La., which moved up a stunning 46 places to capture the No. 2 slot among our large metros. The region lost 11% of its population and nearly 16% of its jobs during the last decade. But now the Big Easy seems to be finding its place again among America’s great cities. Jobs, up 3.5% since 2006, have been created by rebuilding, a resurgence of tourism and a growing immigrant population — the region’s Hispanic population grew by 35,000 over the past decade.

There were other inspirational improvements this year. Sparked by a revival in manufacturing, a host of former sad sacks in parts of the Midwest are showing signs of definite improvement. Niles-Benton Harbor, Mich., a long-time denizen at the bottom of our list, shot up a remarkable 242 places this year to a respectable No. 121. Another old industrial city, Kokomo, Ind., ascended 177 places to No. 215, while Holland-Grand Haven, Mich., improved by 172 places to No. 221 and Grand Rapids, Mich., rose 167 places to No. 183. Milwaukee, a long-time loser among our largest metros, moved up by a healthy 163 places overall to a better-than-average No. 143.

The Northeast Corridor has also made strong progress. Here the likely explanation can be found in the fruits of Obamanomics. The stimulus has been particularly good for the vibrant economies surrounding the ever-expanding federal leviathan. Among the large metros, Washington-Arlington-Alexandria, Va., did best of all the cities outside the South, repeating its No. 6 ranking among large metro areas. Right behind, at No. 7 on the large city list, sits the primarily suburban Northern Virginia metro area, while Bethesda-Rockville-Frederick, Md., ranks 12th.

The other big East Coast winners are the financial and university-oriented economies, which have reaped huge benefits from the TARP bailout and the Obama administration’s college-centric stimulus plan. After the Texas cities and the imperial center, most of the best performing big metros are located in financial and university centers, including No. 9 New York City, No. 10 Philadelphia, No. 11 Pittsburgh, No. 13 Boston and No. 15 Raleigh-Cary, N.C.

So who’s losing? Outside of Oakland and the big Southern California metros — including No. 60 Los Angeles, No. 59 Sacramento, No. 58 Riverside-San Bernardino and No. 50 Santa Ana-Anaheim-Irvine — the bottom tier consisted of a motley crew of mid-South cities like Memphis (No. 64 on the big city list) and still-struggling, former big Sunbelt boomtowns Las Vegas (No. 62), West Palm Beach-Boynton Beach-Boca Raton, Fla. (No. 56), Ft. Lauderdale-Pompano Beach-Boynton Beach, Fla. (No. 54), Phoenix-Mesa-Glendale, Ariz. (No. 53), Atlanta-Sandy Springs-Marietta, Ga. (No. 52) and Tampa-St. Petersburg-Clearwater, Fla. (No. 51).

For the most part, these areas rose with the housing bubble and will not fully recover until the economy diversifies beyond real estate speculation. Already some of the bubble victims are showing signs of life, including No. 155 Merced, Calif., up 134 places, and No. 167 Orlando, Fla., which rode a revived interest in tourism to jump 89 places since last year.

While energy, America’s three wars, the recovering financial markets and real estate problems have played the lead role in setting the stage for the best places to do business, the Intermountain West has shown resilience with Salt Lake City, at No. 20 among large cities; Provo-Orem, Utah, Ogden-Clearfield, Utah, and Boulder, Colo., at Nos. 10, 25 and 26, respectively, among mid-sized cities; and Logan, Utah, and Fort Collins, Colo., at Nos. 9 and 38 among small cities.

As America struggles with a weak economic recovery, opportunities abound across the geography of the states — even in places where it seems bleakest like California, Nevada and Florida. If old industrial areas can stage the glimmers of a comeback, along with over-taxed and over-regulated Gotham, and greater New Orleans can rise from the near dead, these areas, with generally newer infrastructure and attractive climates, might be next to experience a resurgence of their own.

According to the National Association of Home Builders, this “pent-up demand” for new homes is expected to increase only slightly in the coming months, but the new homes to enter the market will be tailor-made to fit Americans’ changing needs and desires in the post-recession years.

“What’s driving it all is affordability,” says John McIlwain, senior fellow for housing at the Urban Land Institute in Washington, D.C., who notes that high unemployment, credit and student loan debt, stricter mortgage rules and a surplus of foreclosed homes will likely continue to scare many first-time buyers from the housing market and keep new home construction relatively slow.

The McMansion home of pre-recession years is on the way out, but a quality home with “well-designed bones” that is relatively inexpensive to operate has become more desirable, says McIlwain.

MainStreet talked to homebuilding experts to learn more about some of the key features home shoppers can expect to find in the new American home this year. Read on to learn all about the modern-day dream home and what not to expect on your house-hunting adventures.

Utility & Value

Homebuilders will continue to scale back on luxury add-ons, which are becoming more of an afterthought, says McIlwain, as homebuyers opt for a more modest and functional home, rather than a McMansion with a Jacuzzi and a heated pool.

“People are looking for shelter and value,” says Stephen Mellman, director of economic services for the National Association of Home Builders in Washington, D.C. “Everyone has their own lifestyle and they want to find a home to enhance their lifestyle and make it more efficient.”

Also with affordability still a huge factor for homebuyers, buying a new home no longer entails “doing fancy things” just for the sake of making a boom era statement, nor does it mean sinking the greater chunk of your cash into a long-term investment, as “the likelihood that that house value will appreciate is extraordinarily remote,” notes McIlwain.

The most noteworthy trend this year is that homebuyers are beginning to see their home as an extension of their lifestyle, whether that means making a strategic move from the suburbs for a shorter commute, having more proximity to downtown hotspots or finding a way to downsize after the children have flown the coop.

“This is shelter,” Mellman agrees, “it isn’t just an investment to sell in a year; you’re going to live here and raise your kids here and that colors everything: how you design it and what you’ll enjoy.”

Fuss-Free Kitchens

Whether your lifestyle is fast-paced or decidedly more conservative, Americans are spending more time in the kitchen and less in the formal dining room, which is starting to disappear. The reasons behind this shift vary from more Americans deciding to cook their own dinner to save on the costs of eating out or our increasing dependence on a usable kitchen that can entertain family and friends. As a result, spacious, eat-in kitchens that open up to the common room are now a huge trend for homebuilders in 2011, and the dining room, once its own separate space, is now simply designated by a table and chandelier, as people “try to do more with less,” says Mellman.

“You want an open kitchen because when you’re doing the cooking and entertaining, everybody gathers in the kitchen,” McIlwain says, noting Americans’ casual lifestyle and our ongoing obsession with food. “You don’t have a maid in the kitchen, but [when you’re cooking] you want to be part of the action. Cooking has become part of the whole entertainment process. And for couples, cooking together is a team sport, rather than an individual sport.”

But despite being the center of attention, the new American home’s kitchen doesn’t look quite as glamorous as it used to.

“The gourmet kitchen is on the way out,” says Mellman. “You don’t need eight burners” or a Vulcan stove, Mellman says. Americans post-recession are focused on standard appliances that they know they will use every day.

“A great stove, a fridge with an ice-maker and water filters, two sinks, a quiet wash dishwasher, or the equivalent—it doesn’t have to be commercial kitchen grade, but a decent quality kitchen that’s easy to move around in, and therefore cook in, with plenty of counter space and that’s easy to hang out in” is where the homebuilding trend is going, McIlwain says.

To save on kitchen construction costs, Dan Sandoval, a homebuilder with Republic Homebuilders in Fredericksburg, Va., says homebuyers are also forgoing traditionally pricey granite countertops for standard laminate countertops.

“Five years ago, they wouldn’t have sold, but now they’re OK,” he says of the materials. “It’s nice-looking, but very affordable,” unlike the dining room, which buyers now consider “wasted space” and an unattractive feature, says Sandoval.

“What I hear from customers is that they just don’t use it,” he says. “They don’t eat in there every Sunday, like their parents used to do. That’s not their lifestyle.”

Smaller Square Footage

It isn’t your imagination—the new American homes are actually getting smaller, according to a National Association of Home Builders’ report, The New Home in 2015.

In it, the NAHB found that the average size of single-family homes completed in 2009 dropped to 2,438 square feet, and in the first half of 2010, the average size of new homes completed continued its slide, dropping to 2,378 square feet.

What’s more, according to the NAHB study, bedrooms and baths have also downsized as well, as the share of single-family homes with four bedrooms or more has declined for three consecutive years, from 39% in 2005 and 2006 to 35% in the first half of 2010, and most new homes completed in 2008 and 2009 had either 2 or 2.5 baths (68%).

So what’s the story behind all these shrinking homes? “New homes that are being built by and large are tending to be smaller because that makes them more affordable,” explains McIlwain, who adds that “even the very wealthy will buy a home much smaller than they could afford,” just to cut back on living costs or perhaps to funnel their money into retirement savings and other mid-life goals.

As a result, certain rooms, like the formal dining room and traditional living room, are becoming extinct species or taking new forms in the combination spaces that are beginning to crop up, such as the eat-in kitchen and dining area, or the second or third bedroom, which has begun to do double-duty as a home office, McIlwain says. “Whether they’re working at home or having a room to keep personal information, such as taxes, an in-home office is more to take care of personal matters,” adds Sandoval.

Meanwhile, Mellman says stairways are moving from their traditional post in the front of the house, or entrance/foyer, to the back and the side, in yet another effort by homebuilders to curtail construction costs and provide more room.

Energy-Efficient Materials

EnergyStar homes have become the gold standard, but homebuyers remain hesitant to splurge on solar roofs or eco-friendly siding, says Mellman.

“Some of my customers inquire about those systems, but they don’t see the return on it,” Sandoval explains about pricey green add-ons. “It’s too costly at this time. Unfortunately, a lot of our customers have lost a lot of their retirement in the stock market, and they’re just trying to get a basic house to last them in their retirement. They would love to have those sorts of things, but they have to think of the costs.”

Tax breaks also play a role, and the lack of them in Virginia makes them even less appealing for prospective homebuyers, says Sandoval. Adds Mellman: “People want to have a green home and incorporate those features, but to a certain extent they’re not going to stretch themselves to get those things. Also, appraisers weren’t including those things for awhile, so a home would sell for less than its actual value and the cost of construction.”

Still, energy-efficiency has become a mainstay for empty-nesters looking to cut down the costs of heating and cooling a home, while other amenities, like EnergyStar windows, are becoming more commonplace and widely embraced.

“Green is no longer an amenity,” says McIlwain. “EnergyStar, EnergyStar windows, very efficient HVAC systems, siding to take advantage of solar power—those are the homes that are selling and they’re becoming the standard. They’re materials you’ve got be attuned to.”

From: Austin Business Journal - April 7, 2011

A Central Austin condo project on Enfield Road will soon be complete after sitting half finished for three years.

The project at 1603 Enfield Road has gone untouched since developer Tadd Coates of Bolter Corp. fired contractor Qmet Building Co. in August 2008, and the two wound through a bitter legal battle. A private investment group led by Eddie Butler and The Butler Family Interests, called 1603 Enfield Ltd., purchased the property from First State Bank four months ago.

Austin-based Fortis Realty Services revived the project. It will total 25 units and be called Pease Place. The company described the units as “sophisticated” and offering a “green living experience.” Builders will use the existing steel and concrete frame, but remove the exterior elements and modify the design. The outside will use an organic color palette with stucco and stone.

Architecture 365 Inc. was the designer. It will utilize energy efficiency systems and sustainable design elements. The apartments, ranging from 500 to 1,300 square feet, will have Hill Country and skyline views, balconies, granite counter tops, Energy Star-rated appliances and wood flooring, the release said.

They will range from $150,000 to $395,000. Construction is expected to wrap up this fall.

Austin city officials recently announced a proposed deal with San Jose-based eBay Inc. (NASDAQ: EBAY) to create 1,000 jobs over the next 10 years. The jobs would actually come from eBay subsidiary PayPal, which employs more than 250 here already.

The city is offering a $1.2 million incentive to the company if it meets its goals, according to the announcement. The average annual salary is pegged at $122,576.

City Council will consider the deal on April 12.

News of the proposed deal first broke on Feb. 28.

The company declined to comment.

“PayPal is committed to our development center in Austin,” where it employs about 300 people, a spokeswoman said a couple of weeks ago. “We’ve been very happy with the support of the local government, the business-friendly environment and the pool of talented workers in the Austin area. We look forward to continuing our operations in this market in the years to come.”

1. Jobs. Housing follows jobs. Period. And while the job market is still slow or non-existent in many areas (nationally as well as regionally), we all know Austin continues to be the leading market in the nation for job growth. 

2. Jobs. At the risk of being redundant, housing follows jobs. Consumer confidence is close to reaching last spring’s high point, the most optimistic the U.S. has felt since 2008. Consumer confidence index for Texas is 89.7, highest it has been since May and up 38.2% from 12 months ago. The U.S. is up 6.9% in the same time period. And while hiring hasn’t restarted in earnest, firing has slowed to a drip. If you haven’t been fired, chances are your job is reasonably secure. Job security drives optimism, planning for the future and home buying.

3. Pent-up demand among young adults. Consider the echo boomers blight (baby boomers kids): 2006 college grads entered the labor market just as home prices began to collapse. Those who still have a job kicked and scratched their way through the Great Recession and are now 27 to 30, perhaps married or getting there and kids may be on the horizon. Some were even smart enough to save some money. According to economists, census bureau, etc., today’s young adults are under-represented as homeowners compared to historical norms, and a disproportionately large chunk lives at home. As the job market crawls back to life, this trend is likely to reverse. And if the apartment market’s strong performance in 2010 is any indication, it already has.

4. Inflation. While much is made of inflation in the media presently, most media (as well as consumers) don’t actually understand it and have been taught to fear it. Inflation expectations, not inflation, are what we should be worried about. Things get scary when consumers start believing that prices are rising, or are about to rise. Just like when rates began creeping up in Oct 2010, we saw a flurry of activity then it slowed. With most consumers, rational economic actions take hold, and rather than filling their tanks when empty, drivers fill whenever they pass a gas station. The expectation of higher prices, not higher prices themselves, is what changes economic actions. Rising inflation expectations pull demand forward, pushing up prices in an inconvenient self-fulfilling prophesy. Historically, real estate has been a rather good hedge against inflation. As people start to get nervous about inflation, they buy real estate. What is the saying? …Buy low, sell high! 

5. Higher rents and low interest rates. Ask a prospective tenant in Austin how the apartment/single family home search is going and the response will not be pleasant. Rents are rising, inventory is down, and landlords are back in the driver’s seat. And despite a recent bounce, interest rates remain historically low. Higher rents and low interest rates push would-be renters towards buying, particularly in Austin.

6. The start of a booming apartment market. As stated in the last couple of weeks, investors are aggressively snatching up multifamily properties as positive signs (such as demographic trends, low interest rates, and perceived values) attract professional and amateur buyers alike. Homeownership is at a 10-year low, young adults are moving out of their parents’ basements and into apartments, and leverage is fantastically cheap. What more could an apartment buyer want? The multifamily space typically recovers first, and if history is rhyming in even the smallest way, this is good news for housing.

7. Investment appetite remains strong. What should you look for?

• A low valuation
  • Lowest valuation in at least a generation
  • Forced Sellers
• A larger than normal number of distressed transactions in that asset class.
  • Distressed opportunities
    • Across all types of real estate — they have come to market slower than expected, which means buyers have had more time to hit the pavement and raise money. With limited opportunities, competing buyers are driving up prices of distressed assets: For every well-priced foreclosure there are a dozen all-cash buyers looking for a deal.
• Attractive financing available
  • High LTV, low rate, fixed rate, long term debt, preferably without pre payment penalty
• Favorable short term supply dynamics
  • Short term oversupplied market, but long term supply is controlled
• Favorable long term demand dynamics
• Demographically driven demand growth
• Favorable Tax treatment
  • 50%+ annual write-off
• Out of Favor
  • Currently, this is somewhat of a shunned/disgraced asset class. Not for long.

8. The stock market is doing well again. At the close of Thursday, the Dow Jones Industrial Average back above 12,000 and the S&P 500 Index topping 1,300 for the first time since mid-2008. IRAs, 401(k)s, and trading accounts are feeling fuller than they have in years. The wealth effect is in full effect as buyers look to sell stock for a down payment and the confidence to pull the trigger on a new home.

9. Confidence. Do you feel better or worse about the U.S. economy, and more importantly your own personal economy, than you did two years ago? This is not a political statement. Challenges remain, but we Americans are a resilient, optimistic bunch. Confidence is relative, and for a country that has been to economic hell and back since 2008, we are in remarkably better shape. Confidence in the present builds confidence in the future, and confidence of all types increases risk-taking activities. Confidence is on a positive trajectory, as we mentioned earlier, particularly in Texas and Austin. The fact that most people believe that we’re no longer headed for apocalyptic economic collapse is, as they say, a good thing.

There is not a better time to buy! The home you look at today will be more expensive this time next year!

Or are they simply reflecting market realities? They see record inventories of houses sitting unsold, and they may not have the money, time or inclination to do fix-ups after making the purchase.

Large numbers of real estate agents consider this a significant and perplexing issue, one that’s having a negative effect on the housing recovery. New research suggests that they may be on to something. A survey by Coldwell Banker Real Estate of 300 first-time buyers found that a startling 87 percent said that “finding a move-in ready home is important” to them.

A posting about fussy buyers on the 203,000-member “Active Rain” online real estate network in late February drew strong support from agents nationwide. Holly Kirby Weatherwax, an agent based in Reston, who wrote the original blog post, said in an interview that some shoppers are so picky that they walk out of well-priced houses solely because of relatively minor imperfections such as:

• The kitchen appliances are by different manufacturers.
• There are no granite countertops – even though the house is a modest-priced starter home.
• A carpet needs to be replaced, or the color doesn’t match their furniture.
• Wall colors are “wrong,” such as white, when for today’s tastes, they should be a warmer hue.

“They’re missing out on some excellent, older lived-in houses – it’s a shame,” she said, “simply because they can’t overlook” flaws that would not have bothered shoppers during the previous two decades.

Zillow, a giant Seattle-based online real estate research and data company, suggests that any shift by consumers toward greater attention to home details may be an inevitable byproduct of today’s higher down-payment minimums and more stringent loan qualification requirements.

According to Zillow researchers, the median down payment in 11 major metropolitan areas has jumped to 20 percent, compared with “close to zero” in some of the same areas just five years ago. In other words, first-time buyers today have to put a huge effort into coming up with their down payment, and they want to make sure that equity investment goes into the house that will need the fewest and least-costly upgrades. Also, Zillow spokeswoman Katie Curnutte said, shoppers in 2011 “are really in the driver’s seat. Nationally, buyers who purchased homes [last] December paid 4 percent less than the asking price. That points to a lot of room for negotiating and opportunities for buyers to be choosy.”

Some agents suggest that buyers today tend to be hipper and more sophisticated about home design, furnishings, floor materials, countertops and appliances because they are exposed to far more information on cable TV than earlier generations. Michael Jacobs, a Coldwell Banker agent in Pasadena, Calif., says cable channels such as HGTV “certainly have opened the eyes of more buyers” to design and presentation details. He said he’s held open houses where young buyers walk in and say immediately, “Oh, this house has been staged” – an observation virtually unheard of years ago.

But constant exposure to cable design shows may also be fostering a lack of realism on the part of some shoppers, according to agents. Cindy Westfall of Prudential NW Properties in Lake Oswego, Ore., said the shows have “given some buyers the impression that all homes should have granite counters, stainless steel appliances, etc. There are a few [shoppers who] want all the bells and whistles of that $500,000 house for $200,000, and no amount of talking to them on the realities can change their minds.”

In an interview, Westfall said she recently had a buyer who was interested only in older houses under $200,000 – starter-home price territory – but who wouldn’t tolerate even the sort of minor imperfections and nicks that older houses typically display.

“The fact is,” Westfall said, “you just can’t have it all. You can’t have the big yard, the top-line updates and all that in a starter home. You’ve got to compromise somewhere or else you’ll never buy anything.”