State of the Market - Part II
In the previous posting on my site I discussed market trends and why, at the time I felt that we would continue to experience market decline through 2010.
Realtors, homeowners, builders and developers alike are no longer in a state of denial when it comes acknowledging that we have experienced serious market decline.
Current Market Trends ~ Inventory appears to have leveled off for most market sectors, especially in the lower price points (regardless of what market we are talking about). The spring months experienced a surge in activity by way of greater sales and more prospective buyers bidding on properties. As we are now in August and the market has returned to its anemic pace of last year it is clear that the “surge” in activity that we experienced was attributed to the Federal Tax Credits that were being offered to prospective home buyers. Yes, it certainly looked good for a couple short months but now we are back in the doldrums of a stale real estate market.
Market Complications ~ Complicating the anemic market further is the fact that credit and mortgages are hard to come by. More stringent reporting requirements that have been placed on banks by Fannie Mae combined with a revised credit score reporting system (as it relates to mortgage applications) have only exasperated the home market.
What will it Take? ~ An ease of credit and mortgage requirements along with a real increase in real income are necessary to refuel this stale market. The last time we experienced such a down market was in 1991/1992. It took nearly 7 years for the market to recover and that is likely true for this market as well.
The market continues its correction reflective of the fact that home prices just got to be too expensive relative to what people can actually afford. According to the Connecticut Economic Resource Commission, in 2008 the average annual household income for the Town of Guilford was $97,577. Comparing this figure to the State average of $67,236 the Guilford figure stacks up quite favorably. The Guilford figure of $97,577 compared to the median house price of $425,000 looks less favorable and, when compared to the average new construction price of $750,000 at that time, the affordability becomes even less feasible.
What’s Ahead? ~ A continued downward trend in prices and values are expected, especially in areas where abundant inventory exists. This appraiser is convinced that the market will continue its 6% decline for the general market through the end of the year and likely well into 2011.
January 13, 2010
Historic Homes ~ An Evolving Market Perspective
By: Marc P. Nadeau, SRA
Being from New England, when one thinks of a historic home the image often conjured up is that of a 1700s center chimney cape, a Federal style from the early 1800s, a Second Empire Victorian or even a brownstone. All have become part of the architectural landscape that helps define New England. The bulk of the architectural styles that everyone from appraiser to homeowner to builder has come to know were for the most part born during a 200-hundred-year period. That period extends roughly from the year 1700 to 1900.
Fast forward to 1950, enter the modernists. The A-list of architects that settled in New England and graced us with some of the most innovative and imaginative house designs include the likes of Philip Johnson, Marcel Breuer, John M. Johansen, Walter Gropius and Paul Rudolph. For those not akin to architectural history and it’s drivers (so to speak), Mr. Johnson was perhaps the most celebrated American architect of the last half-century while Mr. Gropius and Mr. Rudolph served as deans of the Harvard and Yale Architecture Schools respectively.
The modernist style, embraced by some and distained by others has without question earned its place in the American catalog of historic homes. Perhaps most famous of the Modernist movement is the “Glass House” located in New Canaan, CT. The property is now owned and run by the National Trust for Historic Preservation with tours being available.
Philip Johnson’s Glass House, New Canaan, CT
Value of Historic Homes
Historic homes of all periods continue to hold their own against their more modern contemporaries, often being sold at premiums over and above the general marketplace. Homes designed by notable architects also seem to have their own unique value points and typically result in an even greater premium of value. This appraiser, in the not too distant past had the assignment of appraising a Philip Johnson home in New Canaan, CT. The historical array of comparable sales included homes by Johanson, Marcel Breuer and even a Frank Lloyd Wright design. The collective array of sales from these well known architects demonstrated a distinctly higher value point over and above their lesser-known contemporary architects.
Endangered Species
Despite the market’s willingness to pay a premium for historic and antique homes these properties continue to be threatened with demolition from all walks of the development world. Be it the homeowner looking to expand upon an existing structure, a developer seeking to maximize profit or the architect/designer wanting to make more productive use of existing spaces, these properties often become dated, outmoded or just cease to function for the modern-day dweller.
In recent years, there have been a number of publicized properties that faced demolition including the Meeker House, a 150-year-old house on Cross Highway in Westport, a 1950’s Paul Rudolph house on Minuteman Hill Road in Westport and the Alice Ball House, a Philip Johnson design in New Canaan. The Meeker House was disassembled and moved to a different location, the Rudolph house was demolished amidst much opposition and the Ball House awaits an unknown fate. Part of the issue with the Ball House, a 1,773 square foot modernist dwelling, was that the home ceased to meet the criteria for today’s homeowner. The owner, (who happens to be an architect) proposed several scenarios to the town including saving the modernist house, perhaps using it for a guest house or a pool house while building a second more functional home on the same site. The town environmental commission denied the application only making the preservation of the modernist structure less feasible. The application, after revision was approved by the town but unfortunately, opposed by a neighbor who enjoined in a lawsuit against the property owner.
Potential Solutions
There is no question that the remedy for preservation needs to come from the local level. Towns that serve to be home to the varied historic structures should perhaps consider special zoning/development provisions that would serve to preserve the historic architectural fabric. One suggestion would be to allow for increased density coverage on these sites wherein perhaps the footprint of the historic structure would not count toward the overall allowable site density. Preservation today is often about co-existence. An avenue such as this would pave the way for the construction of an additional structure leaving the often smaller, dysfunctional historic dwelling suitable for a guest quarters, pool house or complimentary use.
Bio of the author
Marc Nadeau is a designated appraiser which extensive experience in appraising, redeveloping and restoring historic properties. Clients in this genre include individuals, The National Trust for Historic Preservation, the Connecticut Trust for Historic Preservation and the Philadelphia Preservation Trust. Additional information regarding Mr. Nadeau’s services is available at: www.marcnadeau.com