|This article was published on: 08/01/2006|
FRONT LINES: Fast Takes
Harvard: slowdown is merely a breather
Cooling home sales nationwide won’t last long because continuing strong household growth will fuel more housing demand, Harvard University’s Joint Center for Housing Studies says. Over the next 10 years, there will be at least 2 million more new households than were formed over the past decade. “On the strength of this growth alone, housing production should set records,” the report says. Don’t expect prices to plunge as a result of the current slowdown, either. Markets are seeing neither big employment drops nor overbuilding in housing supply—two conditions that precipitated price falls in the past.
More: 2006 State of the Nation’s Housing
More space without more footage. The trend toward mega-sized houses may be abating as home owners turn their attention to outdoor living and accessible interiors. The number of architects who say they see demand for outdoor kitchens and decks surged to 64 percent from 47 percent a year earlier, while those seeing demand for more square footage dropped to 32 percent from 42 percent, according to the American Institute of Architects’ first quarter 2006 Home Design Trends survey. Led by aging boomers, demand for accessible features and single-story homes is also on the rise.
More: AIA home design survey
Brokerage giant ends newspaper advertising. Columbus, Ohio-based Real Living has given up on newspaper print advertising to focus on the Internet. Newspaper print readership is down to just 54 percent of adults from more than 80 percent in the 1960s, while Internet use is skyrocketing, the company says in a June white paper. Newspaper companies won’t be left completely out in the cold by Real Living’s ad shift, though; a lot of its ad dollars are moving to papers’ Web sites. Real Living ranks fourth nationally in transaction sides based on REALTORŪ Magazine’s July 2006 “Top 100 Companies” feature.
Worried about inflation? Blame housing. Rising rents and mortgages are helping to drive inflationary pressure in the United States. The Consumer Price Index for May showed prices other than for food and energy up 0.3 percent for the third month in a row. Behind that gain, rents increased 0.3 percent and owners’ equivalent rents (what owners would pay to rent a similar house) jumped 0.6 percent. The latter is the largest monthly increase since August 1990. Economist Patrick Jackman of the U.S. Bureau of Labor Statistics, which produces the CPI, told Reuters, shelter costs “have accounted for more than half of the increase in the core CPI in each of the last three months.”