Survey Shows Homeowners Unfazed by Mortgage Troubles
The real estate market appears to be full of contradictions.
On one hand, a recent survey by the online brokerage ShareBuilder found that a majority of Americans are much less concerned about the current state of the housing/mortgage market.
The survey found that 67 percent of the respondents were ‘just as confident’ in their ability to make mortgage payments — even in the current declining housing/mortgage market. Obvious, however, was the finding that 18 percent of those with a household income under $50,000 were less confident than those who make more than $50,000.
With credit getting tighter and many major lenders having to deal with loans that might have not been made in a less boisterous market, the same survey showed 28 percent of those homeowners surveyed planned to increase their spending on home improvements.
Those concerned about the housing market are instead cutting back on entertainment and discretionary spending. Nineteen percent of homeowners plan to decrease their spending on travel and vacations and another 19 percent say they are decreasing spending on dining out.
While this is not good new for DisneyWorld and McDonald’s and those whose investment portfolios include them, it shows how complicated trying to gauge public opinion can be.
For example, while 67 percent of those polled say they don’t care about the housing market, and one can assume that they receive their news about it on cable television and the Internet, real estate agents and builders have been vociferous in blaming the media for the present market.
During a panel discussion of brownfield development at the spring summit of the National Association of Real Estate Editors in Philadelphia, one developer spent the last five minutes of his speech lecturing the reporters and editors in the room, suggesting strongly that they tell their readers ‘the truth’ about the market when they returned to their computer keyboards.
Often, what the surveys say and what the respondents are really thinks bear no resemblance. Gopal Ahluwalia, the veteran vice president of research for the National Association of Home Builders, who periodically produces a study titled ‘What New Home Buyers Want,’ acknowledges that the wish list of the buyers the NAHB surveys gets much smaller once they have to write checks.
Each one of these surveys that buyers want more and more — more space and more amenities — but want it for an unrealistically low price.
The portion of the survey showing an increase in interest in remodeling is easier to support.
Real estate agents in many areas are noticing a greater willingness by people planning to sell their houses to spend some money to get them on the market. Two years ago, when houses were virtually selling themselves, an agent’s suggestions about making even minor repairs or cosmetic changes went unheeded.
In addition, many sellers are choosing to delay listing their properties until they’re convinced that what they want for their house is what they will get. So more money is being spent on remodeling as ways to improve the house for resale and enjoy an improved living environment.
A recent survey of members by the American Institute of Architects showed that for the third consecutive year, home offices are the most popular special function room being requested by clients.
Louis B. Smith, chairman of the AIA Small Projects Practitioners committee, said, ‘Homeowners are looking for more than just a desk in a bedroom. They are looking for additional acoustic privacy, better natural lighting and even separate entry for clients.’
And, while billings at residential architecture firms are representative of the slowdown in the overall housing sector, architecture firms are reporting steady backlogs for projects with an average of 5.3 months of work under contract.
The market environment for home improvement projects, both for additions and alterations as well as kitchen and bath remodels, is reported as very healthy even though growth is not as strong as it was a year ago, according to the AIA.
Still, AIA chief economist Kermit Baker says that overall, residential market conditions continue to deteriorate nationally. The greatest declines over the past year are reported by residential architects in the Midwest, while those in the Northeast report some improvement.
The steepest market declines have come from more affordable homes targeted for first-time buyers, Baker said. There has been some firming in market conditions in the custom/luxury market, while home remodeling activity remains relatively strong in spite of the broader weakness in home building.
Written by Al Heavens forwww.RealtyTimescom. Copyright