A Great Example of Sustainable Building Practices

I spoke about the LEED rating system in one of my previous entries. One of the first structures in Los Angeles to be certified by this organization is ironically a British Petroleum gas station located on the corner of Olympic Boulevard and Robertson. Built in 2007, it is rated “certified” and has many interesting features. It is considered to be one of the most sustainable structures in the city.

Without a doubt, the most noticeable characteristic of this gas station is its triangulated canopy. Made from recycled stainless steel, it houses ninety solar panels and collects rain water for irrigation. In addition to the reused stainless steel, farmed wood, recycled glass, and other sustainable materials were used to build this gas station. LED lighting, which uses less energy, was also used in this project. This service station’s eco- friendly theme was even implemented in the landscaping. Most of the plants are drought tolerant and require very little water to survive. By implementing several different “green” building practices, the carbon footprint of this gas station has been dramatically reduced.

A view from Olympic Boulevard

One of the many planters home to drought tolerant plants

  

The Case-Shiller Index Points to a an Even Grimmer Future

I have referred to the case-Shiller Index several times on my blog. On February 22, 2011, CNNMoney referred to this index in an article indicating that a decrease in home prices should be expected this year. Since I share a similar prediction, I decided to continue reading. Much of the information was redundant; however a comment made by Yale economist Robert Shiller, one of the men behind the Case- Shiller Index, took me by surprise. He recently told reporters, “there is a substantial risk of home prices falling another 15%, 20% or 25%." This is without a doubt the harshest prediction I have heard to date. I believe this forecast will substantially reduce investors’ confidence in the real estate market. Rather than purchasing properties, investors will wait for a better deal in the future in anticipation of lower prices. 

The Top 5 Most Expensive Places to Live

The irony behind an article I found while reading Realtor Magazine titled “Top 5 Priciest Places to Live” instantly caught my attention. As the title suggests, this column lists the top 5 most expensive housing markets in the United States. The market for residential properties in this country is in limbo, yet some cities are still pricey to live in. According to this article, the median price of a home in San Francisco is $625,000. At $109,000, this figure greatly contrasts the January 2011 median price paid for a home in Las Vegas [1]. Such a comparison sheds light on how hard some areas have been hit by the economic downturn.

Also, three of the top five cities in the Realtor Magazine article are located in California. As a California resident, I know first hand that this state is a pricey place to call home. However, I was still surprised to learn that that majority of the five cities listed in this article were in California.  

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[1] Wargo, Buck. "Price of Existing Homes at 20-year Low in Las Vegas - Tuesday, Feb. 22, 2011 | 9:42 A.m." Las Vegas Sun. 22 Feb. 2011. Web. 23 Feb. 2011. <http://www.lasveg assun.com/news/2011/feb/22/price-existing-homes-drops-20-year-low-las-vegas/>.

A Drop in Southern California Home Sales

A drop in home sales between the months of December and January is usually expected. However the decline in sales between December of 2010 and January 2011 was much more extreme than usually witnessed, says DQ News an online real estate database. At 27,706 homes, the number of sales this past January dropped 23.5% when compared to 36,215 sales in December. Also, the price paid for a home last month was $239,000, down 5.9 percent from $254,000 in December. I’m honestly curious why there is so much variation here. These figures clearly illustrate the volatility of the current market for real estate.

Just like most people, I believe the number of home sales per month in southern California will continue to drop throughout 2011. However, I don’t think I can accurately predict how severe this decrease in home sales will be in the future. Keeping this in mind, I plan on referring back to this same database next month to see how these figures have changed.        

Leadership in Energy and Environmental Design (LEED) Certification

Environmentally conscious real estate development practices have been growing in popularity over the last few years, as global warming and climate change have become major issues. Considering this, I think it is only fitting for me to discuss this topic on my blog. The LEED certification is considered to be the most reputable rating system for sustainable building practices and was developed by the U.S. Green Building Counsel. LEED provides builders and real estate developers with a framework for identifying and applying green building design, construction, and operations. The system consists of nine separate subcategories for different building types including commercial, industrial, school, residential, and retail, just to name a few.

Buildings can either earn a certified, silver, gold, or platinum rating in the LEED system. Platinum is the most difficult to achieve. According to an article written by the National Resources Defense Counsel the LEED ratings are determined by the number of credits a building earns in the following five categories: sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality.

There are several advantages to implementing sustainable building practices in order to receive a LEED rating. For starters, this certification provides proof that a developer or property owner cares about his or her community and the environment. This improves the public’s perception of the project. Additionally, this certification saves the property owner money in the long run since it reduces long term energy and utility costs.

CalTrans district 11 Headquarters
San Diego, Ca
Gold rating 

EPA Sacramento Headquarters
Platinum rating

Not the Typical Choice for a Home

Have you ever considered purchasing a home on a cruise liner? Utopia Residencies Co. believes there is actually a demand for these floating residencies. I found out about this cruise liner, which in some way is a hybrid form of real estate, in a Los Angeles Times article titled “For Sail: 200 Homes on Cruise Ship”. The Utopia cruise liner will cost an astounding $1.1 billion to build and will offer rooms ranging in price from $3.7 million to $26 million. To say the least, living on a cruise ship will not be cheap. Since this boat is constantly circling the globe, its residents will have the opportunity to experience almost every major port city the world has to offer.  

To be perfectly honest I think this is one of the worst business ideas I have ever heard of. For starters, the United States and much of the world is currently experiencing a major economic downturn. The market for every form of real estate is in limbo. As if that’s not bad enough, the prices this company plans to sell each individual unit for are simply unreasonable. One can easily purchase his or her own private yacht for the same price as a measly condominium unit on this cruise line.       

The Case Shiller Index Experiences a Double Dip

The Case Shiller Index is perhaps the most reputable home price index in the United States and tracks the real estate market in 20 major U.S. cities. In late 2010, this index’s graph seemed to show that a recovery was on its way. However, this temporary increase in home prices was simply due to the homebuyer tax credits. Now that these credits gave expired, the index has started to drop once again. This “double dip” can easily be seen when graphed. With the current level of unemployment, I do not predict that prices will increase anytime soon. I believe, the downward slope of this graph only strengthens the validity of my prediction.   

The Number of Vacant Homes in the United States: 18.4 Million!

An abandoned piece of real estate in Detroit, Michigan

After browsing through the website “The Real Estate Bloggers”, I came After browsing through the website “The Real Estate Bloggers”, I came across an entry that immediately caught my eye. This article, gave the approximate number of vacant homes in the United States. At 18.4 million units, this statistic absolutely shocked me. As I am sure everyone knows, the market for real estate has not been this bad for decades. Nonetheless, such a figure really puts things into perspective. 11% of all homes in the United States are empty. One can only wonder how much this huge supply of homes will affect property vales when they enter the market. Economists predict this oversupply will cause prices to fall even further in 2011. Personally, I am curious where the residents of these now vacant homes currently live. After all, home sales have fallen drastically over the past few years.    

The Top 10 Fastest Growing Foreclosure Hotspots

For some time I have wondered what the most distressed cities in the country are. An article on www.cnnmoney.com finally gave me the answer I’ve been looking for. Listed on this website are the top ten “foreclosure hotspots” in the United States. Foreclosure rates in these cities might not necessarily be the highest in the country but are growing at the fastest pace. Topping the list is Spartanburg, South Carolina. The rate of foreclosures here has increased a shocking 228% in 2010.

In my opinion, the main cause of such an increase in the number of foreclosures is job loss. After further research, I learned that the unemployment rate in this city is well above the national average. Adrian Kudler, the blogger responsible for forclosure.com, also comments on this same article. He also blames unemployment for the foreclosure crisis. Poor lending practices are also a cause of growing foreclosure rates. Simply stated, banks around the country gave millions of Americans loans they were clearly incapable of paying. Some lenders didn’t even check a borrower’s credit, income, and financial background. 

My Opinion on Robert Shiller’s Interview with The Wall Street Journal

Robert Shiller, a world famous economist, makes several interesting points that I agree with during an interview with the Wall Street Journal. Robert Shiller and I share a similar pessimistic view about the current market for real estate in this country since we both expect property values to decrease even further. Although the market showed signs of improvement for roughly a year and a half when the homebuyer tax credit went into effect, things have changed over the last few months. Property values, in addition to the number of homes sold per month, have once again started to decrease. A great deal of uncertainty exists. During the interview, Shiller states that he thinks the market for real estate will experience another serious downturn in the near future. This makes a lot of sense since most markets cannot recover in just eighteen months.

Robert Shiller

"Mad Money's" Jim Cramer and his forecast for 2011

I recently came across this video of Mad Money Host Jim Cramer on Housingdoom.com. Unbelievably, he thinks home prices will actually increase in 2011. This prediction completely conflicts with the forecasts of most real estate professionals. I am personally convinced that prices of the majority of homes will continue to fall in 2011 when stockpiled distressed homes enter the market. In addition, demand for homes will not increase until the unemployment rate falls since people cannot purchase a home without a steady source of income. Without this increased demand for homes, recovery will be almost impossible. At roughly 9.5%, the national unemployment rate is still quite high. To say the least, I’m beginning to question Jim Cramer’s knowledge of the real estate industry. 

San Marino: the only upscale community that has witnessed a rise in home prices

Before reading this article from The Los Angeles Times, I was under the impression that every community, no matter how opulent, was experiencing a decrease in property values. I was shocked to learn that of all places San Marino, a residential district in the San Gabriel Valley, is the only exception to my assumption. In the midst of this housing crisis, home prices in this community have been steadily increasing. The reasons for such a stable increase in prices, even during a financial crisis, make a lot of sense. This community’s school system, small town feel, cleanliness, and exclusivity make this district extremely marketable.  

The figures illustrating San Marino’s Prosperity in comparison to other extremely wealthy districts really surprised me. The median home price in San Marino is around 1.5 million dollars; up 1.6% from the previous year (Los Angeles Times January 31, 2011). In comparison, Beverly Hills has seen its median home price fall an astounding 18.6% since 2008. To say the least, this contrast in prices is pretty incredible.