The author of the new book, “Pop! Why Bubbles Are Good for the Economy,” says that if home owners, buyers, sellers, builders, lenders and real estate can hold on, there are good times ahead. “Bubbles have always been good in the past, and historically, we recover from them quickly,” business columnist Daniel Gross said at the Urban Land Institute’s annual fall meeting last week in Las Vegas. Home owners have learned a thing or too about housing finance when the high-flying mortgage market was offering all sorts of products, including some very toxic ones. The notion that refinancing may be beneficial is now part of everyone’s mindset.

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For owners who can’t afford to move up to a larger or nicer home, a makeover may offer the perfect solution. But recouping those costs depends on what gets done. Remodeling is an option many homeowners turn to when the housing market experiencing a downturn. Typically, after home sales slide, remodelings climb, but contractors say it’s a mixed bag now. Elite contractors haven’t noticed a change, but industrywide, the numbers are down from the rapid growth of the early 2000s. Tightening consumer credit and financial unease have some homeowners holding back. The recent survey shows that bathroom and kitchen remodelings and additions remain highly valued by buyers. Updated kitchens always provide a certain pride of ownership. Upgrades such as stainless-steel appliances and granite countertops impress even buyers who don’t cook much. (more…)

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After three decades of a level increase in homeownership, the national rate began rising around 1995. The rush for consumers to buy homes was fueled by an enormous surge in housing construction and affordable home prices. Surprising new research published by the Federal Reserve Bank of Atlanta concludes that the bulk of the increase was caused by innovations in the mortgage market. In particular, the explosion of “piggyback” or “combo” loans made it possible for people to make small or zero down payments. Young families with little savings flocked to those loans to buy their first homes. Many analysts have fingered easy lending as a contributor to the housing boom, but the Atlanta Fed paper may be the first to quantify its effect in a rigorous way. Using math-heavy econometric analysis, the authors conclude that the availability of new kinds of mortgages, mainly ones with low down payments, accounted for 56% to 70% of the decade long increase in the U.S. homeownership rate, while demographic changes accounted for only 16% to 31% of the effect.

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According to the latest government reports, the number of vacant homes for sale rose in the third quarter. The numbers cast a harsh shadow, indicating a continued weakness of the housing market. The Census Bureau report puts the number of vacant homes for sale at 2.07 million in the period, up about 2 percent from the second quarter, and 7 percent above year ago levels. However, the number is down 5 percent from the record high reading reached in the first quarter. There are always some homes vacant and for sale, even in a booming real estate market. But the combination of overbuilding by home builders in the middle of the decade and problems in mortgage markets this year that made it more difficult for buyers to get the financing they needed to buy a home has swelled the inventory of vacant homes on the market. (more…)

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Americans spent a record $200 billion on home remodeling, according to the National Association of Home Builders Remodeling Market Index. A large portion of that figure can be attributed to new and improved kitchens. Remodeling your kitchen is one of the very best investments you can make in your home, one that promises an 80 percent to 90 percent return when it’s time to sell. The biggest breakthrough in countertops is the use of quartz composite. It is stain-proof, heat-resistant, extremely hard and durable, and antibacterial. You can even cut on it without damaging your countertop although you’ll dull you knife. Since quartz composite does not absorb, you can work with meats and poultry directly on the surface. The color choices are varied and manufactures are answering the call for this surface to look more natural as demand grows.

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