Wealthy Zip Codes Making a Comeback

The majority of U.S. cities are still feeling the pain of the houses crisis. However, as I predicted in a previous entry, market recovery in opulent regions should be faster. My forecast proved to be accurate. According to a CNNMoney article, over the last year, “million-dollar-plus” home sales have jumped roughly 19%. For example, “San Jose, Calif., had the biggest market for million-dollar homes, with a 27.4% spike in sales last year”. Unfortunately, this good fortune does not apply to the majority of this country’s population— homes sales (and prices for that matter) in cities such as Las Vegas and Florida are still falling

The reason for this jump in upscale home sales is actually quite simple. Rich people are returning to their old spending habits and are more confident in their ability to splurge. Not surprisingly, spending on homes has gone up. After all, real estate is also a good long-term investment— especially at a time when prices are relatively cheap. 

Automated Parking is Coming to L.A.

You heard me right— automated parking! Until recently, I never even knew this even existed. However, according to the blog Curbed L.A these parking structures of the future are becoming more and more popular. To my surprise, there’s already one in Hollywood. I think this is a great idea. The company responsible for such a great invention is Sky Park. Aside from costing less to build than subterranean parking, there are many other benefits.

One is a more efficient use of space. Since ramps don’t have to be built, cars can be parked close together. This system benefits the environment. This is because cars aren’t left running indoors where fumes can build up. Compared to traditional parking structures, automated parking is also much safer. When cars are parked they are inaccessible to would be thieves. As if that’s not great enough, this system reduces long-term costs since attendants and large amounts of concrete (which is becoming more and more expensive every year) wont be needed. Even simple things like lights, cleaning systems can all be eliminated. Sky Park is even expandable!           

R.E.O. Properties Reach their Highest Point Yet

The number of R.E.O. properties has reached a peak of 2.2 million. Bank owned properties (R.E.O.) are a huge part of the current real estate market and make up a large percentage of sales. Although the number of foreclosures sales has been increasing, so too have the number of foreclosures— according to Realtor Magazine, 33% month over month. Not surprisingly, the 2 states that lead the pack are Florida and Nevada. Like I said in one of my previous entries, roughly one in every one in every seventy-six homes is bank owned.

I think these statistics make it clear that we are nowhere near market recovery. A sharp increase in R.E.O. sales is not enough (most buyers are speculative investors hoping to get a retune in a few years). For the market the rebound, the number of foreclosures must go down. People must pay their mortgages on time and in full.        

The Chinese Super-Bubble

Jim Chanos, founder of investment company Kynikos Associates, said that, “China’s on an economic treadmill to hell… They may very well become Dubai times 1000.” As I reported in a previous entry, Dubai is in the midst of its own real estate crisis, one that makes ours look relatively small. $263 billion worth of projects have been cancelled or put on hold; and property values have fallen more than 60%. Some of you may be asking yourself: compared to Dubai, can the situation in China actually be worse? The fact of the matter is that China’s real estate bubble makes Dubai’s look trivial. As if that’s not bead enough, the Asian super-bubble is still growing. Its explosion will likely lead to a massive economic meltdown.

The Chinese bubble’s rapid growth can be attributed to several things. The first reason boils down to poor lending practices. For years, the government kept interest rates unusually low— at around 5.3%. This stimulated the economy and made GDP go up. Little did finance officials know that their efforts to improve the economy would lead to its likely demise. According to Jim Quinn, the author of an article titled Why the China Miracle is Really a Debt- Financed Bubble, “bubbles can only form when monetary policy and/or fiscal policy is extremely loose”. A great example of this— and its consequences— is the American subprime mortgage crisis. Here in the U.S, many people criticize Alan Greenspan for precipitating the U.S. real estate crash “with his 1% interest rates in the early 2000’s”. Now imagine implementing Greenspan’s tactic on an exponentially larger scale— Chinese banks got into this predicament by giving out huge loans with very low interest rates to people who cannot pay them back. Sound familiar? If the outcome of the situation in China even slightly resembles what happened here in America, a massive market crash is almost inevitable!   

Another cause of the Chinese real estate bubble is shady lending. Although government- regulated, most banks gave out many more loans than they were legally permitted. Recent estimates by Fitch Ratings on The Market Oracle suggest that banks lent out about 30% more money— informally of course— in 2010 than the government limit of 7.5 trillion Yuan. A substantial amount of this money was invested in real estate, making the bubble grow. Just like in the U.S, getting a loan in China was far too easy. Common sense and logical thinking were superseded by greed. Amazingly, this all occurred while the government was trying to put such lending practices to an end.

An additional explanation for the Chinese real estate bubble is unsustainable market growth. It’s impossible for the market to grow at such a rapid pace and it’s just a matter of time before it begins to nosedive. The statistics are mind- boggling. According to an article titled “China’s Housing Bubble”, six years ago home prices averaged just 500 Yuan per square meter. That number has skyrocketed to roughly 8000 Yuan. That’s an increase of 1600%! Compare this to the United States where prices only increased about 120% (and look at the chaos that ensued). Such a drastic difference in growth rates puts things into perspective— China is an economic time bomb. Since the market for real estate is cyclical, it’s obvious that such a rapid level of growth will be short lived.    

The main cause of the real estate bubble is a huge oversupply of expensive homes. Government investment in real estate spurred a construction boom in 2007— and it still hasn’t stopped. The Chinese skyline is dotted with what seems like hundreds of cranes.

This dramatic oversupply can be explained by a few things. One is overbuilding. Even in a country this large, the supply of homes drastically exceeds the demand. According to The Market Oracle, there are sixty- four million vacant homes and apartments in China— enough to house 15% of the country’s entire population or 200 million people! As I stated in one of my previous blog entries, there are 18.3 million vacancies in the United States— yes, that’s a huge number— but compared to the Asian Superpower it’s drop-in-the-bucket. Overbuilding isn’t even confined to large cities. Ghost towns have sprung up all across the country, the most famous of which is Kangbashi— 90% of homes there are empty.

Considering this, some of you may be wondering why developers continue building— the answer: speculation. Rich speculators buy these units and, in hopes of future profit keep them in great condition, but refuse to rent them out. These investors are convinced that the government won’t allow prices to fall; so they keep buying homes at an alarming rate, creating a demand that’s at best artificial. This explains why even though vacancies are rising, prices are still falling.

One last reason for this oversupply of homes is market distortion. This mainly stems from speculative investors’ greedy tactics. One reason why vacancies are still rising is because— at today's prices— the majority of the Chinese population cant afford a home. A study conducted last year by The Chinese Academy of Social Sciences found that a typical property costs 8.8 times the average national income. According to The Beijing University of Technology, this figure can be as high as twenty two times the average income in cities such as Beijing. Compare this to five times the average American’s income of around $52,000. Keep in mind, the daily wage of many Chinese citizens is roughly a single dollar. In a country where so many people are poor, demand for such expensive homes is practically nonexistent. Unless prices drop to acceptable levels, vacancies will continue to go up.

Luckily, the Chinese government finally realized that they have a major problem on their hands—sixty-four million vacancies must have been an eye- opener! In an article titled Be Afraid— Very Afraid: China’s Bubble is Set to Blow, Alain Sherter states that Chinese leaders have started to “tighten lending standards and raise interest rates to cool the real estate market”. I don’t think this will be anywhere near enough. It’s too late for the Chinese economy to be rescued; it’s in too deep of a hole. Also, this country’s complicated banking system makes it very difficult for soon-to-go-bankrupt companies and lending institutions to be bailed out. Sherter agrees since he thinks real estate bubbles, especially one this large, can’t be popped so easily. As of April 14 2011, Moody’s Investors Service (a very reputable financial research agency) even reduced China’s “property sector rating from stable to negative”. Most people, including myself, are convinced that the market for real estate in China is on a dangerous path. I think this country its way to an unparalleled economic disaster.

A ghost town in mainland China

An Analysis of the U.S. Housing Market

According to zillow.com, property values in cities like Las Vegas have fallen as much as 60%. This alarming decrease in prices can be attributed to a jump in delinquencies because of poor lending practices and the explosion of the housing bubble. Other causes of this disastrous crash are a ten-year appreciation run from 1997 to 2007 that was bound to end, as well as high unemployment.   

Via Mary Umberger, Steve Harney compares the surplus of stockpiled foreclosed homes to water built up behind a dam. Property values follow the basic rules of supply and demand, so when those homes enter the market later this year, prices will drop five to eight percent. Therefore, Harney thinks, it’s best to sell.

I originally thought home prices would rise. But Harney’s argument changed my mind. For the most part, I agree that home prices will continue to fall. Austin Anderson, a market analyst and professor at the University of Southern California, also predicts that the same will happen in extremely distressed areas such as southeast Michigan and southern Florida. This is because banks are expected to sell the stockpile of three to four million homes in these regions, but were unsure if values would increase or decrease in 2009 and 2010 and refused. Just like their approach to giving out loans— where borrowers must meet strict standards to even qualify— this strategy of holding on to properties is very conservative.

Another reason why people think home prices will decrease has to do with the high number of vacancies. In one of my previous entries, I discussed how this also contributes to the oversupply. Currently, the number of vacancies in the United States exceeds 18.3 million. Banks own three to four million of these, while the remainder are privately owned. The U.S. housing surplus will continue to go up as long as vacancies increase. 

This glut of homes for sale drives prices down. This conclusion is supported by not only the blogging community, but also the theory of supply and demand. For example, the author of a blog entry on monevator.com predicts that home prices will fall as much as 10%. Morgan Brennan, a writer for Forbes, also agrees when she states that “2011 will witness further price declines.” A CNN Money article titled “Home Prices Near 2009 Lows— and May Fall More” also shares a similar view. 

The market will also recover slowly because the demand for homes is currently stagnant. This is another reason for “rock- bottom” home prices. Currently, the demand for homes trails the supply.

This lack of demand can mainly be attributed to two things. One is that consumers expect home prices to decrease further. A Gallup poll conducted earlier this year shows that about 27% of Americans agree with Harney and expect home prices to fall. Hoping to get a better deal in the future, most people— even those that can afford it— have avoided purchasing a house.

Another explanation is shockingly high unemployment. Many people who could not make their mortgage payments and were evicted are currently unemployed and will take a while to find a steady job. As of April 2011, The Bureau of Labor and Statistics calculated that the national unemployment rate was 8.8%. For the market to rebound, the number of jobs created will have to be higher.

Although Harney’s reasoning is well thought out, I do have one criticism. When compared to very distressed areas, I think that home prices in wealthier parts of the country, such as west Los Angeles, San Francisco, and Orange County, will recover faster. This is not to say that these pricey communities have not been adversely affected. After all, I reported in a previous blog entry that celebrities such as Nicholas Cage and Allen Iverson have even been foreclosed on.  

Fewer foreclosed homes, those being sold for a fraction of what they were worth years ago, are located in these opulent regions. As the number of foreclosures in a community rises, neighboring properties suffer. These toxic properties have a spillover effect on homes nearby, making their value go down. According to RealtyTrac, just one in every 786 homes in San Francisco received a foreclosure filing. Compare this to Las Vegas where one in every 76 homes is bank-owned. The relationship between the number of foreclosures in a region and property values is clear— depreciation rates in areas with many foreclosures are higher. This smaller supply of distressed homes will make the economic recovery in upscale parts of the country stronger.

Home prices in affluent parts of the country will also go up at a faster rate because of the logic behind supply and demand. Rich people with money to spend on real estate— those that prefer to live in upscale districts— create a demand for homes there. As the economy slowly heals itself, more and more middle to upper class professionals will see their incomes return to “pre-recession” levels. This will allow them to return to their old, more lavish spending habits. Spending on expensive homes in certain parts of the country will increase, strengthening demand.

I think Harney’s prediction about the direction of home prices makes a lot of sense. With so many houses waiting to be sold, not to mention a lack of demand, I’m not surprised that our view is widely shared.

Some of the most distinguished names in real estate also predict that home prices will drastically decrease. One person is the father of the Case Shiller Index: Robert Shiller. He stated in an interview with the Wall Street Journal that “there is a substantial risk of homes prices falling another 15%, 20%, or 25%.” These numbers have not been heard of since The Great Depression—prices fell 25.9 percent between 1928 and 1933 compared to over 26% in today’s market (zillow)! 

 

Plans for the University Village

As a USC student, the University Village (UV) is a common sight. However, it’s seen better days and is in desperate need of a remodel. This view is widely shared. Luckily, plans are in place to completely revamp the center. The man behind it all: USC alumni Rick Caruso (the developer responsible for lavish projects such as The Grove and The Americana). Expected to open in at least 6 years, the final project is supposed to embody the typical “Caruso look”—a mall with a Mediterranean flare.

According to a statement by university planners, the project will cost over 1 billion dollars, create roughly 12,600 jobs, and provide housing for over 5,000 students; and that’s just the start. Several retail stores, a super market, and movie theatre will be located on the “mixed-use” site. Additional academic space is even in the plans.          

         I think remodeling the dilapidated UV is a great idea. After all USC is short on student housing and can always use the additional sales revenue. The jobs created from both construction and daily operations should also help Los Angeles locals who are currently unemployed. Furthermore, this development will create an expected 3.8 million dollars annually in tax revenue.  

The Top 10 Most Affordable Cities

As I’m sure everyone knows, over the last few years home prices around the country have drastically fallen. In some cities, prices are still going down. According to Realtor Magazine the median price of a home in the U.S. is roughly $199,500— down from about $400,000 before the crash. However, certain markets have been hurt much more. Realtor Magazine recently posted a list of the top 10 cheapest cities in the United States. Coming from someone who lives in California— where homes tend to cost a lot— the amount by which properties in some parts of the country have lost value was shocking.

The cheapest city— Detroit— really stood out. The median price of a home here is just $99,000— “down 13.84 year-after-year”! Since there are so many foreclosures in Detroit, I always knew homes here were cheap. But, $99,000 is hard to believe. I also think that this drastic depreciation rate can be attributed to a lack of demand because of the region’s high unemployment. To say the least, this really shows the housing crisis’ detrimental effects.

The remainder of the list— which shows the median home prices and depreciation rates— can be seen below.

1. Detroit

Median list price: $99,000

*Down 13.84 percent year-over-year

Median days on the market: 101

2. Fort Wayne, Indiana

Median list price: $109,900

*Up 0.92 percent year-over-year

Median days on the market: 126

3. Dayton-Springfield, Ohio

Median list price: $109,900

*Down 2.66 percent year-over-year

Median days on the market: 150

4. Toledo, Ohio

Median list price: $114,900

*No change in year-over-year

Median days on the market: 164

5. South Bend, Ind.

Median list price: $115,000

*Down 0.78 percent year-over-year

Median days on the market: 170

6. Springfield, Ill.

Median list price: $124,900

*Up 0.73 percent year-over-year

Median days on the market: 113

7. Akron, Ohio

Median list price: $130,440

*Down 6.82 percent year-over-year

Median days on the market: 162

8. Cleveland-Lorain-Elyria, Ohio

Median list price: $134,900

*Down 2.95 percent year-over-year

Median days on the market: 162

9. Las Vegas, Nevada

Median list price: $134,900

*Down 9.46 percent year-over-year

Median days on the market: 120

10. Wichita, Kans.

Median list price: $135,000

*Down 1.24 percent year-over-year

Median days on the market: 107

The Top 11 Cities Where You Can Sell Your Home the Fastest

I came across an article on Realtor Magazine’s website which lists eleven cities where homes sell the fastest. This entry may make a few of you who live in these areas and plan on selling you home particular happy.

Interestingly, many of these cities— Oakland, San Francisco, Los Angeles, Bakersfield, San Jose, and Fresno—are located in California. Since most real estate market analysts expected for this state’s housing market to recover faster, I wasn’t surprised. As a matter a fact, I predicted that affluent cities such as San Francisco and Los Angeles would have a speedy recovery. I guess I was right. After all, rich people with money to spend tend to prefer homes in these areas over less glamorous cities such as Bakersfield.

What surprised me the most about this article was that Oakland, California placed first— homes are on the market for just 50 days. Now that I think about it, this is probably due to the fact that people working in the “Silicone Valley” create a demand for affordable homes. Keep in mind, the median list price here is about $319,00—compare this to San Francisco where the median price is an astounding $639,000. Buyers looking for homes in northern California can get a great deal in Oakland.

Prince Avoids Foreclosure

Seven-time Grammy winner Prince almost made it to the growing list of celebrities who have been foreclosed on. However, according to foreclsoure.com, he avoided losing his home by paying his bank a lump sum payment of $368,000. This equates to all of the delinquent payments he “forgot” to pay on his 20- acre Minnesota home.

What surprised me the most when I read this article wasn’t that the Pop- Music- Icon was able to simply cut a check for more than $350,000. After all, he has the money— he’s Prince. I’m most curious about what prevented him from paying his mortgage in the first place. Last time I checked, a home loan is a pretty hard thing to forget about. Keep in mind, he probably has several assistants working for him; and they even forgot!   

USC is Going Green

You heard me right! According to the April 25^th issue of The Daily Trojan, USC is officially on track to become an environmentally friendly campus. The administration’s end goal is for certain buildings on campus— for example, Pardee Tower (a residence hall)— to be certified by LEED. I have already spoken about the LEED (Leadership in Energy and Environmental Design) rating system several times; so, there’s no need for a refresher. Measures have already been taken to lower USC’s carbon footprint. For example, most dorms have low energy power strips. Efficient laundry machines and low output showerheads have also been implemented— all in an effort to reduce water consumption. Nonetheless, the key to a “greener” campus is a flexible and environmentally conscious student body.

I think making the USC campus more environmentally friendly is a great idea. Global warming, climate change, and the depletion of non-renewable resources are big problems that must be dealt with. Luckily, many college student are well aware of the environmental problems we are facing and will probably be willing to make a few changes their lifestyle. However, as mentioned in The Daily Trojan article, costs cannot be transferred to students for this plan to succeed. USC already costs too much money! 

A Home Made from Bottles?

Several of the homes I’ve spoken about on this blog have been pretty unique. Some were built using paper and others using railroad ties. I recently read about a home in Quilmes, Argentina on the website greenlaunches.com— it was built using six million bottles! Made by Tito Ingenieri, this home is a cross between a junkyard and modern art. The owner’s main goal was to build a low cost home that was sustainable and environmentally friendly. In this case, all six million bottles were donated and the home helped recycle millions of bottles. So. It’s safe to say both of his goals were achieved.

This house can be considered a “sustainable dwelling” for a few reasons. To start off, most of the materials that were used to build it were recycled junk— old bottles, scrap metal, and second-hand furnishings. This home also uses less energy because the bottles help keep it cool in the summer and relatively warm in the winter. As if that’s not enough, this home still kept six million bottles from entering a landfill.

There’s no doubt in my mind that this house is unique. How often do you see a home built using bottles? Even though I’m not an environmentalist, I can’t help but be impressed by the fact that such a large house was built using recyclables. Even though this home may be unsanitary, it’s still pretty cool.

The Trend of Los Angeles Home Prices

As I’m sure many of you know, home prices in many major U.S. cities are still falling. One of these cities is Los Angeles. Bubblemeter.com recently posted a graph showing the trend of Los Angeles home prices. According to the graph, the “city of angels” is still in trouble; but that not what mainly grabbed my attention.

What instantly caught my eye was the sudden jump in prices around 2006. The market’s rapid grown can easily be seen by the provided chart. Sudden increases like this are a clear sign of trouble. This is especially true for real estate since the market is cyclical. What’s just as interesting is how suddenly the market began to nosedive. By 2007, prices began to tank— this was the start of the market crash. This graph also shows the expansion and explosion of the housing bubble—the sudden rise indicates the expansion and rapid drop signifies the explosion.          

The Future of Coastal Living

Many people around the world dream about living by the ocean. I guess this explains why some people are willing to pay a small fortune for a beachfront home. Take for example Cher’s $45 million dollar Malibu mansion. However, over the last few years, designers and architects have become more daring. Companies such as “Sub Find” offer what they call a “semi-submerged dwelling environment”— the Trilobis 65. These homes are a cross between a submarine and a houseboat and are the closest thing to living underwater that I’ve ever seen. Half of the dwelling is submerged while the other half reaches a height of about 3.5 meters above sea level. The Trilobis 65 is divided into four separate levels and accommodates six people comfortably. The top floor houses common areas such as a kitchen, while the lowest level (3 meters below water) is an observation bubble. As if all of this isn’t impressive enough, these “homes” can still move under their own power.  

        The Trilobis 65 is also designed to be environmentally friendly. For starters it uses hydrogen to power its AC motors. To be as sustainable as possible, the semisubmersibles also implement solar power. Sustainable materials are also used. To avoid using too much energy for air conditioning, a system that automatically tints the windows is in place.    

I think this is one of the coolers things I have ever seen. Just imagine having an all- glass basement that’s completely underwater. I could spend hours just staring into the ocean around me. The views residents experience must be nothing short of amazing. However, I can’t imagine living in a home like this full time. Nonetheless, if I had the money, I would love to have a home like this as a vacation home! Who wouldn’t?

A Sign of Hope for South Florida Residents

The economic downturn left Florida residents, particularly those of the southern tip of the state, in financial turmoil. Foreclosure rates here are sky-high. The only region worse than here is Las Vegas. Luckily, the state government enacted the “Hardest Hit Program”. This program literally hands out cash—up to 12,000— to prevent foreclosures. I think the government’s strategy is great. People in certain parts of the country have really been suffering. Measures like this will help ease the pain. Fortunately, the “Hardest Hit Program is actually working”—foreclosures are slowly dropping. I think this program’s success shows government action and planning at its best.

Nonetheless, one thing still concerns me: how does the government plan to finance programs like this long term. After all, for those who qualify, money is pretty much being handed out. This will almost surely create a future tax burden. The current deficit is already big enough!

Regardless of this major downside, more programs like this should be created. The foreclosure crisis we’re facing can't be ignored.  I’m usually not an advocate of government intervention, but action must be taken now.        

   

Finally, Some Good News!

Commercial real estate (this mainly refers to offices) is actually improving! This is some of the best news anyone has heard in a long time. According to Realtor Magazine, “troubled loans are dropping, occupancy is soaring, and office building sales are rising”. The number of defaults is also falling. After three long years of vacancies, low sales figures, and lousy rents the worst may be over. Could this be the boost the market has been waiting for?

Regardless of this good news, I think the market for real estate as a whole will take much longer to recover. I don’t think this small improvement will make much of a difference in the grand scheme of things. After all— in the U.S— the vast majority of properties (in terms of value) are homes. Vacancies and foreclosures in the residential segment are still sky high. Nonetheless, at least for one market segment (commercial), it’s a start. Don't get me wrong, this is still good news!  

The Top 10 Worst Sates to Earn a Living

I came across a very interesting article on moneyrates.com by Richard Barrington titled “The Ten Worst States for Making a Living”; one that I think is particularly important for soon-to-graduate college students entering the job market like myself. This study considers a state’s average wage, cost of living, tax rate, and unemployment rate to determine the worst places to earn a living. I think it’s worth mentioning the top four states.

One is Hawaii— this state ranked first. I wasn’t too surprised about this since it is an island and needs to have most of its goods flown in, increasing living costs. However, the amount by which it leads the group was a different story— the adjusted average income is about 7000 less than its closest competitor! This, in addition to a high tax rate and low adjusted- income, make living in Hawaii more about enjoyment and pleasure than making money.

At first, I was pretty surprised to learn that Maine and Montana were ranked second and third (even before California). However, things became clear when I found out how low the adjusted income in these states is— $29,159.19 and $29,495.73. These rankings can mainly be attributed to low wages.

California’s ranking (4^th) didn’t surprise me. After all, it’s a know fact that it’s expensive to live here— everything from homes to everyday necessities cost more. For example, California has some of the highest gas prices in the country.

Job hunters (and anyone planning on moving) must consider how affordable certain areas are before making major decisions. Richard Barrington’s study makes the importance of conducting research clear. A lack of information can potentially cause a new family or employee financial hardship.  

Here’s the full list compiled by “the real estate bloggers”:

   

Interesting Architecture— An Understatement

I’ve written about many unique homes on my blog—everything from oversized mansions to a home built using railroad ties. I recently read about a housing project in Joshua Tree that will be constructed using shipping containers. I’ve seen an art exhibit built using these huge 40- foot containers before and surprisingly the building looked pretty cool. Everything about this home’s design is unique.

The majority of the structure will be built using five shipping containers (each of which weighs about 5000 pounds and two large water tanks. Aside from being visually appealing, these tanks will also store water since this home will be completely off the grid.  The home’s modern interior is simplistic and hides any sign of the shipping containers it’s surrounded by. This hybrid project will be built by ecotechdesign, an environmentally- friendly design firm known for combining unusual materials with sustainable building practices. The “container house at Joshua Tree’s” small carbon footprint also make it that much more unique.

 The home’s frame will be built using recycled steel and will also have a living roof with draught- resistant plants, radiant heating and cooling, and a grey-water irrigation system to consume as little water as possible. As stated earlier, the two large water tanks are also functional. Floors and countertops will also be made of recycled bottles and other similar materials. Although this home has not been LEED certified, it definitely qualifies.

A Not-So-Typical Building Material

I’ve shown several over- the- top homes on my blog—usually extravagant ones with huge price tags. However, I found a home on the blog Curbed LA that I think is worth mentioning. This house is by no means the size of a small hotel, nor does it cost that much. It doesn’t have 5 kitchens like the home I spoke about it Miami or gold- plated door handles. But, it was built using believe- it- or- not: railroad ties! This rustic style home is located on Catalon Ave in Woodland Hills and has two bedrooms. It’s currently on the market for $409,950.

Surprisingly, this home looks like many other rustic homes built in the same time period. Most people probably wont even be able to tell that the homes exterior is covered in railroad ties since they resemble the wood panels many homes in the city are covered in— just bigger. I personally think the home’s builder pulled it off. The interior— which resembles the inside of a cabin— has the same homey rustic feel as the exterior.    

Southern California Home Sales Show Little Improvement in March

Home sales in March remained flat according to a recent Los Angeles Times article. The median price of a home hovered around $280,500— a 2% increase compared to February. However, this price is still 1.6% les than that of March 2010. Sales were also down 5.2%. Not surprisingly, about 36% of these sales were for foreclosed homes.      

Several real estate professionals, such as DataQuick president John Walsh, think that these dismal figures foreshadow the market’s direction for the rest of 2011. This prediction makes a lot of sense. I agree that the market isn’t going to recover anytime soon. Foreclosures will continue to go up. Fueled by an excessive supply of homes for sale, I also think homes prices will keep falling. The market for real estate is still on a very dangerous and unpredictable path.  

   

Las Vegas Home Prices Still Falling

Bubblemeter.com recently posted a chart showing that Las Vegas home prices are still dropping. The explosion of the housing bubble in 2007 can clearly be seen on the graph—prices reached their peak in 2006 and plummeted a year later. At its peak, the average price of a home here was roughly $350,000 (adjusted for inflation); that number has nose-dived to roughly just $130,000. Foreclosures in this city are at an all time high and in some cases property values have fallen as much as 60%!

This drop in prices explains why investors have flocked to Sin City. Investors looking to make a profit when the market rebounds purchase the majority of homes here— using cash of course. Although the short- term outlook seems grim, renting out foreclosed properties and reselling in a few years can be a major money- maker.

Who Would Have Ever Thought Selling Homes Could be Dangerous?

Ashley Okland 

According to an April 11^th Realtor Magazine Article, a real estate broker named Ashley Okland was murdered while conducting an open house. What’s even more chilling is that this isn’t the first attack on a real estate professional in the state of Iowa—another broker was assaulted while showing a home in Ottumwa, Iowa this past February.

To say the least, these two attacks have shaken up the real estate community. Many real estate professional in the area have been scared to go to work since the shooting. Some have even cancelled open houses.    

Turning a Home Into a Billboard… You’ve Got to be Kidding Me!

You heard me right! Some people are actually turning their homes into giant billboards as a way of earning some extra money during these tough economic times. Sometimes, the monthly check for providing this service is enough to cover an entire mortgage payment!

Adzookie is the company responsible for this creative idea. The entire transformation takes between three to five days. Each home is completely covered in eye-catching colors and emblems that match the company the home is supposed to represent. For example, a home advertising Facebook was painted bright blue— the social networking site’s signature color.  

Although this idea is creative, I don’t think it will be too successful. Most people probably aren’t willing to turn their home into an attention- grabbing billboard, and for good reason. For starters, the homeowner’s will lose their privacy. As if that’s not bad enough, coming home to an ugly house painted many bright colors isn’t something most people would like to experience on a daily basis.  

Shigeru Ban: Architectural Genius

I spoke about Shigeru Ban, the world-renowned Japanese architect known for designing eye- catching structures using paper, in an earlier blog entry. To say the least, this man and his amazing gift amazed me. So, I’ve decided to give you some more information on this architectural genius. 

Before I begin, I’d like to give you some background information on Shigeru Ban. He was born in Tokyo, Japan in 1957, but now lives in Paris where he has his own architecture school and studio. He himself attended the Southern California Institute of Architecture. Ban’s claim to fame is using paper to design and build some of the most amazing buildings I’ve ever seen— everything from shelters for disaster victims to massive cathedrals. Here are just of few of the projects he was involved with. His style is both futuristic and “open to the elements”.

The Centre Pompidou-Metz is probably one of his most famous projects. Modeled after a Chinese bamboo hat, this structure houses the new Pomidou Museum in Metz, France. The buildings oddly- shaped roof was made using sixteen kilometers of laminated wood fiber.

Shigeru Ban is also the driving force behind The Aspen Art Museum located in Aspen, Colorado. The majority of this 30,000-square-foot environmentally- friendly building will be constructed using its architect’s favorite material— paper. The project will end up costing almost 30 million dollars and will capture the beauty of the surrounding area.

Click the following link for a slideshow of some of Shigeru Ban projects: slideshow

Centre Pompidou- Metz

The Aspen Art Museum