Teardown Post

NAR released news today that higher end home sales have picked up dramatically from last year.  Sales volume for homes priced between $700,000 and one million are up 29 percent from last years levels.  The reason seems to be lower rates on jumbo loans and a more confident lender for big ticket homes.  Hopefully part of the bottoming process……….

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From where we sit (Hinsdale, IL), the market for redevelopment property has improved.  Is this temporary - I don’t know.  What we do know is that those builders that have the capital (and courage) to undertake spec projects are capturing the existing business and have become the benefactor of any new business (building new custom homes for clients).  Activity seems to be breeding opportunity.  Maybe it’s time to peek out from under the desk, get some funding, find a price point in the marketplace that is void of good product and get back to work?

While price discovery is still in process.  We are seeing buyers begin to be more aggressive in their search for property.  In some cases, we clearly have seen the pendulum swing too far to the downside filling pricing gaps formed from the great “run-up” in prices from 2002-20051/2.  New price handles in the $200’s are being bought up quickly.  On the other end, and most surprising, some new construction projects - both for “spec” and custom are valued and trading at price points actually higher than during the height of the bubble - figure that out.

It’s not easy out there but, at some point we will look back and see where we bottomed.  We just may be there now.

  Brian

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Just saw this really interesting article in the New York Times. Wouldn’t it be great if all people in the construction industry were this conscientious? What I really like is that Brad Guy is using his experience to generate statistics that will be of use to others, and is also investigating how this type of endeavor could provide jobs for those who need them. What he’s doing is also a much-needed smackdown to the wasteful machine-based demolition that is so emblematic of the teardown phenomenon.

I hate teardowns, as do most preservationists. I hate them because they are shortsighted and wasteful. I hate them because they destroy history and a sense of place. I hate them because they represent the worst aspects of the all-American need for everything to be shiny and modern and huge and up to date. I hate them because the buildings constructed to replace the demolished structures are often not only completely out-of-scale and out-of-style for the neighborhood environment, but of significantly inferior construction. I hate them because they signify another victory and a big cash prize for some vulture developer, giving him the means to begin the process anew on yet another property.

I hate teardowns (on a deep-personal-bias level) because my childhood home is in a landfill, and one by one, the houses of our neighbors are joining it, recreating the neighborhood in the sense that they are all ending up commingled as useless rubble, detritus of the ridiculously high land values in my hometown. My high school is also in the landfill, along with the childhood homes of at least three of my friends. The town library may be joining them next year. If the permits section of the town paper is any indication, the tanking economy has done nothing to stop the bulldozers.

The end result of this is that when I go home, there is less and less of my past to show my children. Even the much-beloved woods behind our house is gone, because the McMansion they built on our old foundation extends so far back that the back yard disappeared completely. So not only was the house destroyed, but dozens of mature trees too.

My old house was a well-built 1955 Cape Cod, on a loop street of almost-one-acre lots containing a mixture of Cape Cods and “Colonials.” Each house was based on one of five models but customized so that no two were alike. They were beautifully proportioned to the size of each property, and nestled charmingly on their wooded, hillside lots. The smallest houses were small, don’t get me wrong, and even the biggest ones were not palatial, but they were pleasant and adequate and easily expanded if more space was needed. Our house started out with six rooms and ended with ten.

I knew the house was coming down as soon as my parents said the winning bid was from a builder who wanted to “remodel” it. The guy gushed about how great the house was and how he wanted to make it better than ever, and offered them $20,000 more than the family from across town who wanted it. How do you say no to a buyer who outbids others by that much? If my parents were willing to take that bait, how much more willing would you be if you were, say, the executor of some old person who’d finally died and you needed to pay off some big debts or wanted to cash in to the utmost possible extent?

When we learned the guy was definitely not “remodeling,” I called him. He had sent out a letter to all the neighbors indicating his plans, and including his cell phone number if anyone had questions. I’m not sure what I hoped to accomplish with this, other than maybe inflicting some guilt, or maybe salvaging stuff. Mostly I wanted to get inside the vulture’s head and know why. Why couldn’t they retain at least part of it? What was so wrong with it that the entire thing needed to come down?

The guy was civil but terse. He had “hoped to renovate” (not!) but then decided there was really nothing he could do with the house to make it the way he wanted. It didn’t have central air. The front bedrooms had low ceilings (well, duh. It’s a Cape Cod!). The bedrooms were too small (compared to a McMansion). The master bathroom was too small (i.e. it didn’t have room for double sinks and a soaking tub and a shower you could wash your car in). In short, “Nobody wants to live in a house like this any more.”

On and on, he ranted about all of its faults, and I’m thinking, if it sucks that much, why did WE ever want to live there? What does it say about us that our house, which we thought was an attractive, updated, spacious place to live, was apparently worthless crap? What does it say about our 28 neighbors, who are getting along just fine living in similar houses?

My parents had the foresight to offload some of the more movable and valuable house parts before they left, just in case. They sold the Vermont Castings woodstove to one friend, and the kitchen appliances to someone else. But everything else: the almost-new green marble bathroom floor, the woodwork my dad had carefully repainted before they listed the house, the kitchen closet door inscribed with 26 years’ worth of our height measurements, the Craftsman-style oak banister in the family room that we all helped sand and finish when we added on, a whole house’s worth of hardwood floors, joists, studs, built-in bookshelves, good-quality doors and sash windows that nobody makes anymore - gone.

They did at least reuse the foundation, reportedly now plagued by frequent flooding due to all the trees in back being ripped out. My initials are carved in the concrete basement floor, so I guess part of me still haunts the site. But there’s nothing left otherwise.

(And there’s an irony in the fact that the one house on the street that produced a historic preservationist was the first to fall, and initiated the neighborhood’s irreversible plunge into teardown bait: of 29 houses, 4 have now been forcibly removed and replaced by towering monsters. Our former neighbors now have this gallows humor of “why bother fixing [fill in the blank] - when we sell, they’re just going to tear the house down anyway!”)

So I have to give major props to Brad Guy. He is raising awareness in such a valuable way, and I’m glad the Times has publicized what he’s doing. Salvage on that level is perhaps the best possible outcome for a teardown situation, ascribing worth even to a house that is too decrepit for any other outcome, and making the best of the many undeserving victims of the trend. Even if our house couldn’t be saved, I would feel infinitely better knowing that parts of it had gone on to productive second lives. If I knew some other kid was watching the world through our windows, or slamming my old bedroom door in a huff, I’d be more thrilled than words can express.

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An article in Forbes  decribes a new method of building removal called hybrid deconstruction.  Homes that are demolished are being deconstructed freeing up resources like wood and tile that can be reused to build homes for eco-sensitive people willing to pay more for an abode with gentley used floors.  “Fans of the genre predict revenues will go from $12 billion this year to $60 billion by 2010″.

“Tax breaks on donated materials can make deconstruction a very attractive option.  A 2,000 square foot house might contain 6,000 board feet of lumber, equivalent to 33 mature trees.  60% of that can typically be sold for reuse”.  In this case the homeowner who choose deconstruction benefited with over $30,000 in federal tax deductions.

This seems to suggest alternative “green”benefits for infill redevelopment i.e. teardowns.

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Does a family with two kids really need a 3,200-square-foot home?” asks Vickie Nyland, president of developer Taylor Morrison’s Northern California Division, also based in San Ramon. “I think nesting is what our culture is going through now.”

So look for these in the next few years: smaller single-family houses, as compact as 1,500 square feet, clustered around village-style greenspaces; infill housing that revitalizes old commercial and industrial space in cities and suburbs; modernist styles for young singles and couples who want the urban buzz of “Seinfeld” and “Sex and the City.” Expect to find more ecologically friendly homes with tankless water heaters, built-in solar panels and water-saving drip irrigation. Say goodbye to “volume” ceilings and media niches …

Here’s what’s coming, and in some cases, ready now:

• Upgrades for home electronics. Designers are wiring houses for computer use everywhere. And with flat-screen TVs, every room can be a media room. The “new house of tomorrow” set to open at Disneyland will feature a digital lifestyle that’s already available. According to one source, you’ll be able to walk in the door after work, shout out a song title, and hear the music before you can open the refrigerator and grab a beer.
• Condos with homelike and neighborhood features. Oakland’s Pacific Cannery Lofts include areas equipped for residents to wash their dogs and secure bicycle storage in a “bike lounge.” Due soon is a cafe and gallery featuring work by local artists and gourmet Blue Bottle coffee.
• Going green. Buyers are more concerned about “sustainability” to cut heating and cooling costs, water and electricity use. But builders say they’re not always willing to pay for green features. (For ideas, and Bay Area builders, check out www.BuildItGreen.org.)
• Multigeneration houses. Builders are designing not just in-law apartments, but communal and private space for grandparents and extended families.
• Garages in the back, not the front. Builders call it “private lane” access for parking, not back alleys. But the result is the same, shifting cars and driveways. “Nobody wants to look at garages,” says one building executive.
• Fewer cookie-cutter developments. “Builders are looking for more diversity, an eclectic blend of styles” to give buyers some semblance of individuality, says Cheryl O’Connor, vice president of sales and marketing for Warmington Homes’ Northern California division and chairwoman of the Northern California Home Builders Association.

By Robert Taylor read on …

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