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'Gastronomic Extras' Are Latest Amenities

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | November 30th, 2012

If the way to a man's heart is through his stomach, can builders and developers land homebuyers via the same route?

That may be something of a stretch, but food-related amenities are fast becoming a way to make today's new home communities stand out from the competition.

For example, a few years ago, developers would have asked authorities to chase away any food truck that set up shop near their community centers. And if a homeowner turned his backyard into a farm, the community association probably would have objected.

Now, mobile dining and urban agriculture are the rage, and forward-thinking developers are welcoming vendors and gardeners as part of their amenity packages. Call these new edible community features "gastronomic extras."

Mobile kitchens are helping to energize many downtown markets at lunchtime, and they can do the same at master planned communities, according to panelists who shared their best ideas on what it will take to succeed at a recent Urban Land Institute (ULI) conference.

Mobile vending used to be the sole purview of ice cream trucks and food and vegetable wagons. But now, a wide variety of gourmet and ethnic meals are being served from vans and even pickup trucks.

These meals-on-wheels are welcome not only at lunchtime but also in the late afternoon -- say, just after school -- or any other regularly scheduled time, such as during sporting events.

"Creative retail is a wonderful thing," said Theresa Frankiewicz, vice president of community development at Crown Community Development of Naperville, Ill.

Just as hot as mobile dining is urban farming. In fact, agriculture is supplanting golf courses as today's must-have amenity, said Randal Jackson, president of The Planning Center/DC&E, a consulting firm headquartered in Santa Ana, Calif.

One good thing about gardening is that developers don't have to devote big acreage to it, which is important with today's downsized projects. Whereas golf courses can easily gobble up a couple of hundred acres, community garden plots may require as little as an acre.

Some builders are offering storage sheds, arbors, greenhouses and even vegetable beds as options. One well-stocked backyard garden can produce enough produce to feed the entire block, according to one ULI panelist.

Following the same food-based theme, Adam McAbee of John Burns Real Estate Consulting in Irvine, Calif., recently noticed a couple of attention-grabbing features that are intended to stick in visitors' minds long after they've left the premises.

One, in a San Diego market with a predominantly Asian buyer profile, was a wok kitchen, offered as an "extended prep" area off the main kitchen. Another was a sales office that looked decidedly like a French countryside cafe, where prospects could linger and sip coffee.

Creating a social infrastructure has long been as important to developers as streets and sewers. But nowadays, that means going beyond intranet systems and clubs, especially if the property is large enough to support retail and commercial components.

Anything that gives a project a sense of place and encourages social interaction will create value, the ULI panelists stressed. It could be a trout stream, such as the one running through a Salt Lake City project, or a riverside park, such as the one below a spaghetti freeway in Houston.

One of the best tools for bringing people together is restaurants, according to developers. "You buy a couch once every 10 years, but you eat three times a day," said Jonathan Brinsden of Midway Development, the developer of the CityCentre mixed-use property built on an old mall site in Houston.

Other people magnets are athletic clubs and hotels, if the properties are large enough to support them.

"Athletic facilities are part of our daily lives now," Brinsden said. "And public spaces are so ingrained in our DNA that they are the most valuable acres in our project."

Todd Meyer of the SWA Group, a worldwide planning, urban design and landscape architecture firm, agreed.

"People like to get out and enjoy open spaces," he said. "They are great gathering spots anybody can walk to at any time. But they can't be sterile or boring. People need to have things to do, so create the kind of venue where people like to mix with each other."

But the project doesn't have to be big to be bountiful. Take Taxi, a 20-acre live-work-play property being built on the site of an old taxi garage just outside downtown Denver.

As relatively small as it is -- six buildings with 25,000 square feet of commercial and residential space -- about 400 people work for more than 80 different companies at Taxi. Occasional seating and dining areas can be found along the halls, which are called streets.

The two-story, low-rise project is a place where the younger generation can escape the high-rise culture and express themselves, said longtime Denver developer Morton "Mickey" Zeppelin.

"It's sort of like not having to make your bed in the morning when mom isn't home," he said.

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Recovery Spreads to More Markets

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | November 23rd, 2012

The housing recovery is well under way, according to the latest and best indicator of house prices. And it's more widespread than ever.

Prices on a per-square-foot basis are up in 86 of the nation's 109 most-active "core-based statistical areas," according to data collected as of Nov. 1 by Pro Teck Valuation Services of Waltham, Mass.

Uncle Sam defines a CBSA as a geographic "micropolitan" area of at least 10,000 people who are tied to an urban center by commuting. In nearly a fifth of the nation's CBSAs, prices are absolutely booming, rising by double digits.

Year over year, the median price of a house in the Phoenix-Mesa-Glendale market in Arizona was up a whopping 35.82 percent per square foot as of Nov. 1. At the same time, the median in Cape Coral-Fort Myers, Fla., was up 25.11 percent per square foot. And it was up 22.3 percent in Tucson, Ariz.

Price per square foot is a better standard on which to judge the trajectory of housing prices because it adjusts for product mix. Other measures are influenced by the number of sales. And too many deals in one price bracket or another can produce a false reading.

For example, if there are an inordinate number of high-end sales during the period studied, the average price of all the houses sold -- or even the median -- will appear much higher than it really is. An unusually large number of sales at the low end will produce a figure that is too low.

But the median square-foot price tends to even things out. By "normalizing" for swings in the type and size of houses sold, it represents a truer picture of the market.

Pro Teck's figures also are more current and detailed than any of the other indexes you might hear or read about. Whereas the others are often three months old -- and some may be an ancient six months late -- Pro Teck's figures are updated at least daily from 850 multiple listing services nationwide. And because the sources of the data are so widespread, the Massachusetts company's figures are more detailed, drilling down, down, down to the ZIP code and even neighborhood level, where they are most helpful.

National numbers are great for headlines, but they don't tell buyers and sellers what's going on where they live. Even on a square-foot basis, national numbers are all but meaningless.

For example, the mythical cost per square foot nationally is $90. That's an increase of 4.5 percent, from $84 as of Nov. 1, 2011. But that means little. After all, who lives in Nationally, USA?

Isn't it better to know that in the last year, the median price of houses in the North Port-Bradenton-Sarasota portion of southwest Florida where you reside -- or want to reside -- rose 10.4 percent per square foot? Armed with that kind of information, you'd know that if you wanted to buy a 3,000-square-foot house in Sarasota, you could expect to pay roughly $3,000 more.

Southwest Florida is just one of 20 CBSAs where prices have increased by double digits in the last year. Many of those were hit hardest during the downturn. Now they are recovering at a rather fast clip, probably because most of the foreclosures have been lapped up by bargain hunters and investors.

Whether they continue to do well will depend on two things: when would-be sellers decide that prices have risen enough for them to actually put their homes on the market, thereby relieving some of the pressure on supply, and whether there is an abundance of still-to-be-foreclosed houses, the so-called shadow inventory, waiting in the wings.

For the most part, increases in per-square-foot prices tend to correlate well with median prices. But not always.

In the Detroit-Livonia-Dearborn, Mich., CBSA, for example, the median price per square foot was up 16.85 percent from Nov. 1 a year ago. The median price of houses sold in the Detroit market during the same period was up 16.58 percent.

But in the Bethesda-Rockville-Frederick CBSA in Maryland just outside of Washington, D.C., the median price of homes sold was up 4.74 percent, whereas the median price per square foot was up 12.44 percent, an almost threefold difference.

Some of the more noteworthy gains in the last year include the Las Vegas-Paradise CBSA in Nevada, where the median price per square foot is up 10.76 percent, from $67 to $75. In West Palm Beach-Boca Raton-Boynton Beach, Fla., the median rose 13.5 percent per square foot, from $95 to $108.

The price trend in the Boston area, on the other hand, has remained essentially flat over the last 12 months. In the Boston-Quincy CBSA, the square foot price did not move from $189. In the Peabody and Springfield CBSAs, it dipped $1, from $182 to $181 and $126 to $125, respectively. And in Worcester, Mass., it was down $3, from $132 to $129.

Nationally, the most expensive houses are in the San Francisco-San Mateo-Redwood City CBSA, where the median price per square foot is $472, up 8.15 percent from $437 a year ago. But another Northern California CBSA -- San Jose-Sunnyvale-Santa Clara -- isn't far behind at $457 a foot, a 19.65 percent jump from $382.

At the other end of the price spectrum, the least expensive market of the 109 most active is the Detroit CBSA, where the median price per foot is a mere $51. The next cheapest CBSA is Palm Bay-Melbourne-Titusville, Fla., at $56 a square foot.

Top 10 Price Gains (median price per square foot)

Nov. 1, 2011 Nov. 1, 2012 Percentage change

Phoenix-Mesa-Glendale AZ $65 $88 35.82

Cape Coral-Fort Myers FL 58 73 25.11

Tucson AZ 75 91 22.3

San Jose-Sunnyvale-Santa Clara CA 382 457 19.65

Boise City-Nampa ID 72 84 17.18

Detroit-Livonia-Dearborn MI 44 51 16.85

Oakland-Fremont-Hayward CA 214 249 16.18

Warren-Troy-Farmington Hills MI 69 79 13.57

West Palm Beach-Boca Raton-Boynton Beach FL 95 108 13.7

Fayetteville-Springdale-Rogers AR 69 78 13.22

Source: Pro Teck Valuation Services

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'Conditions' Can Be Deal Killers

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | November 16th, 2012

The typical real estate sales contract includes not just a price and a closing date but also a number of clauses, any of which can trip up the buyer or seller and scuttle the deal.

While contract language may vary from one place to another -- not just state to state but also county to county, and sometimes even from one company to another -- here's a quick rundown of some clauses or "conditions" that are likely to cause the most trouble:

-- Financing. Perhaps the most common contract condition makes the transaction contingent on the buyer obtaining either a mortgage or a written commitment in the amount required to complete the purchase within a certain time frame.

Each part of this clause is important, obviously. But according to real estate professionals, the timing aspect can be the most troublesome. The sooner the buyer can complete this condition, the better. If the deadline passes without a loan approval, the seller has the right to cancel the contract.

"Since financing contingencies can be complex and vary widely, they require strict attention to all timelines involved," advises Sam DeBord of Coldwell Banker Danforth in Seattle.

But buyers beware of using this clause to get out of the deal. You could find yourself in default if you fail to follow through on what you agreed to.

In Virginia, making a substantive change -- seeking a loan that far exceeds the amount specified in the contract, for example, or being unable to find a rate that's lower than what's stated in the contract -- may put your earnest money deposit in danger. In Minnesota, if your financing falls through after you have satisfied the financing contingency, the seller can keep all the earnest money as damages.

On the other hand, Florida contracts are "very one-sided" in favor of buyers, reports Liane Jamason of Smith & Associates in Tampa. Twice in recent weeks, Jamason had to deal with upset sellers who mistakenly thought they were entitled to their buyers' deposits when their financing fell apart after months of waiting to close.

-- Closing costs. A poorly worded clause here can cost the buyer or seller a lot of money, depending on how it's written.

Often, the agent writes in the contract that the seller will pay X amount toward the buyer's closing costs at settlement, when what the buyer really wants is that X amount be paid toward closing costs, points, prepaid items, lender allowed costs, warranties, administrative costs and fees.

"Closing costs are really only those associated with closing the transaction and may be far less than the entire list of financing charges," explains Jim Mellen of RE/MAX Peninsula in Williamsburg, Va. "A buyer who shows up at the table planning to have $6,000 paid on his behalf will be awfully angry if he gets only $1,200 of his fees paid."

Another possible issue is how the closing cost contribution is stipulated. If it is given as a portion of the selling price, say $300,000, a 3 percent contribution could cost the seller $9,000. But if it is written as a part of the financed amount, say $240,000, the seller would be on the hook for just $7,200.

Make a mistake, and there are no do-overs. "The written word on a contract will trump intentions all day long," Mellen says.

-- Disclosures. The different property disclosure clauses are "some of the more difficult to navigate," says Ralph Harbison of RE/MAX Realty Brokers in Birmingham, Ala. Buyers tend to want "yes" or "no" disclosures, but sellers prefer something that says they are not aware of any issues. And that leaves buyers to wonder what's wrong with the place.

Writing certain inspection clauses -- termite, radon, mold, lead-based paint, home -- into the contract should go a long way toward removing the buyer's anxiety, but only if the buyer adheres to the contract's timelines.

In Florida, for example, the buyer typically has 10 days in which to obtain and review a home inspection. The buyer can cancel the contract during this period by providing a written notice to the seller, or he can ask for an extension. But issues arise when the buyer tries to negotiate repair credits or actual repairs and the inspection period expires.

"If the repair issues cannot be resolved during the initial inspection period, the buyer must execute the cancellation or extension," says Blair Damson of Coldwell Banker in Coral Springs, Fla.

In the Philadelphia area, as long as the buyer adheres to the time limit, he only has to notify the seller that he does not wish to proceed to get back his earnest money deposit. But Linda Williams, an attorney/agent with Sage Realty in Wayne, Pa., goes a step further by making sure the deposit is not payable to the seller until after the inspection period ends.

In Warren County, N.Y., broker Mark Bergman, president-elect of the local multiple listing service, writes inspection clauses with specific repair cost limitation "to prevent frivolous renegotiation."

-- Dates. One more thing about timelines: Be explicit. Contract language should be clearly spelled out in either calendar days or banking days, says Magda Robles of Keller Williams Properties in Weston, Fla. "Number of days is not good enough," she says. "Specify the specific month, day and year.

-- "As is." This clause can be a double-edged sword, says David Welch, a broker in Orlando, Fla. While the seller is not obligated to make any repairs found necessary during an independent home inspection under the as-is clause, the buyer can cancel for any reason if he does not like what the exam has revealed.

-- Short sales. Buyers need to be leery when a "seller" in a short sale commits to paying closing costs. The bank is the seller, not the occupant, warns Christy Walker of RE/MAX Signature in Phoenix. As such, the bank has every right to renegotiate the fees or refuse to pay them at all.

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