MHN Blog

Mixed Life, Mixed Use

As office hours get longer -- thanks to the longer work week and always being available via cell phone, e-mail and other things that ring and beep -- personal time is getting shorter. It's hard to find a balance between both.

Your local developer may be able to help. Mixed-use developments featuring stores and restaurants have, in the past, addressed our lack of free time, providing "one-stop shopping" (sometimes literally). And now, mixed-use communities are evolving to tackle the tenacious balance between work and what happens when work ends for the day.

Two interesting examples:

• The "Busidence." Although it was originally designed as a shopping mall, apartment and hospital structure, Bahçelievler-Istanbul's Metroport development has been redesigned as a residence for businessmen. Twenty-five units, ranging from 110 to 400 square meters, offering scenic and coastal views are currently on the market, priced from 125,000 to 795,000, according to the Turkish Daily News.

Common in Tokyo, London and New York, a busidence is sort of condohotel/corporate apartment mix -- giving busy workers an efficient work and living space that feels like home (complete with health center, sports facility and a restaurant).

The complex has space for meeting with clients and a home office. And should you travel frequently for business, the Metroport -- just 10 minutes from the local airport -- is also working out a deal with Turkish Airlines to allow residents to check in for flights without ever leaving the building.

• Employee Communities. Faced with a high cost of living in Dubai, the Dubai World Trade Centre (DWTC) created a 406,000-square-foot residential community for its employees in Ras Al Khor, Albawaba.com reports.

The community offers 794 studio, 1- and 2-bedroom units, along with a multi-purpose entertainment complex containing gymnasiums and indoor game facilities for employee's families.

The complex also contains a medical center for both emergencies and minor aliments; a restaurant, supermarket, laundry facilities and an Internet cafe.

"Finding quality accommodation that is reasonably priced is one of the major concerns for people working in Dubai nowadays," WTC Director General Helal Saeed Al Marri said. "By designing this community, we have given our employees housing which is extremely affordable and includes all the necessary elements for a comfortable stay."

Shuttle buses will take employees to the office.

The real estate markets in Istanbul and Dubai are anything but slow. When Turkey passed legislation five years ago allowing foreigners to buy property, it gave the real estate market -- bolstered by Turkey's low cost of living, easy purchasing process and availability of Mediterranean vacation homes -- a shot in the arm.

Foreigners have since spent more than $7.2 billion buying 30,000 homes, according to the Turkish government. In fact, foreigner property sales increased by 59 percent to $2.9 billion, BusinessWeek reported.

Likewise, Dubai is on the upswing: With recent population surges, estimates place the total value of Dubai real estate projects over the next 10 years at $230 billion.

Speed vs. Need

Developers, take note: These two developments are excellent examples of tailoring a project to its target audience.

Not only does determining who specifically is most likely to buy units in your development help with sales marketing efforts, it will help with a development's longevity.

Even in booming real estate markets, it's important to avoid quickly planning new developments to capitalize on the local housing need -- a temptation for any developer. Carefully planning new mixed-used developments can help ensure their pre-sale rate. And more importantly, it can facilitate their future resale success.

When those local markets dip (and they will at some point), mixed-use complexes with strong ties to a specific group are likely to fare better than luxury developments and generic new residential complexes that are designed (and marketed) for the general public. Location is always a selling point; and a residence custom-designed to suit your lifestyle will always have appeal.

It's hard to think about tough times when the market is high. But to provide buyers and investors with the best possible investment -- and safeguard yourself, should things dip before expected -- it's absolutely imperative.

Brad Pitt To Aid New Orleans' Rebuilding Effort with Sustainable Housing

New Orleans has been struggling to rebuild since Hurricane Katrina devastated the city in 2005, but more help is on the way -- from Hollywood.

Brad Pitt, speaking Wednesday at the Clinton Global Initiative, announced plans for a new community of homes in New Orleans' Lower 9th Ward, the area hardest hit by Katrina.

The plan is to:

• Form a core team of local, national and international architects to construct 150 sustainable homes.

• Involve the Lower 9th Ward in the rebuilding.

• Create an affordable, green-designed, sustainable community to serve as a model for future rebuilding efforts.

The new homes are part of Pitt's "Make It Right" project. Pitt, who owns a home in New Orleans and worked last year with Global Green to develop green multi-family housing in the Lower 9th Ward, and partner Steve Bing, a film producer, pledged to each match $5 million in contributions.

"The heart and soul of New Orleans, specifically the people of the Lower 9th Ward, are paramount to this project," Pitt said. "The words of one elderly man who is determined to return to New Orleans led to the name of our organization: He asked us -- directly, simply and profoundly -- to help make it right. So that's what we're doing."

Rebuilding, Recycling

William McDonough + Partners will lead the effort. McDonough + Partners are practitioners of "cradle to cradle" thinking, which was developed by William McDonough and Michael Braungart in the book "Cradle to Cradle: Remaking the Way We Make Things" (North Point Press, 2002).

Using natural systems as inspiration, the cradle to cradle philosophy involves trying to build using only recycled products and to reuse all products in biological or technical systems, essentially creating waste-free building. The philosophy will be applied to material selection and design for the new Lower 9th Ward homes.

Make It Right is a noble plan -- but even more admirable given its commitment to green building.

Using sustainable design to create the 150 new single-family homes will help keep residents' cost-of-living down once they do move back to the ward, where houses were flooded and swept off their foundations during the storm. Homes will be designed to reduce energy costs -- which is important, since before the storm, the Lower 9th Ward was considered a low-income area of the city, and its residents must now rebuild the neighborhood from scratch.

The recovering city will also benefit from the Make It Right project's efforts to reduce environmental impact.

Brad Pitt couldn't agree more. "We're going to help to make it right with 150 sustainable, affordable houses," he said. "Houses that stand out for their design both aesthetically  and structurally, so that these people can live in beautiful safe structures that respect their spirit and provide a good quality of life."

The Make It Right team also includes the architecture firm Graft, which Pitt has worked with previously on international projects; the Cherokee Gives Back Foundation, the nonprofit arm of Cherokee specializing in sustainable redevelopment of environmentally-impaired properties; and Trevor Neilson and Nina Killeen, advisors to the Jolie-Pitt Foundation.

Green Building Gets Nods from the Residential Market

When making an argument for green building, one of the first things green proponents will bring up is the over-time savings -- which can balance out the initial extra sustainable building costs.

However, the green building focus thus far has largely been on commercial green building. That's partially because of the scope of commercial construction -- larger building projects use more materials and create more waste, so building green buildings will make a greater impact on the environment than building smaller home structures would.

But that's not to say the residential market has totally ignored the green trend. It's become more popular in recent years, and although it's still gaining support, there are signs that residential green building is becoming a business:

• Banks such as Bank of America are adding green financing packages. In March, it announced its Green Mortgage Program, offering  a reduced interest rate or $1,000 back for each home-purchase mortgage meeting ENERGY STAR specifications.

• In 2006, almost 9,000 people attended the West Coast Green residential builder show in San Francisco; this year, more than 10,000 attended (4,000 more expected), according to the San Jose Mercury News.

• And the U.S. Green Building Council has expanded its energy-efficiency rating system to include homes. So far, 7,500 homes and 330 builders are taking part in the pilot program. Home- and building-owners get credits for using green materials used, which can help them get lower mortgage rates and tax incentives from state and local governments.

• Green furniture is also on the upswing: Jackie Hirschhaut, vice president of the American Home Furnishing Alliance, told the Arizona Daily Star that "A wide variety of eco-friendly furnishings will be available to consumers this summer and early fall."

It's also likely green building first took off in the commercial sector because of the centralized planning it requires -- large developers fund several projects at a time and many cities have passed legislation encouraging or requiring green building practices.

In neighborhoods and small towns, aside from entire planned divisions, you're dealing with individual builders, small building companies, contractors -- even people building their own homes. The highly individualized system makes it harder to encourage green construction.

And of course, large developers are likely more able to absorb any extra green building costs, as opposed to small suburban building companies or individual homeowners.

But the residential market is showing interest in green building. And the incentives banks are offering, coupled with increased industry research and promotion, just may turn the green trend around -- and bring it right home.

Protecting Yourself from Housing Defect Accusations

Within the housing industry, there are so many wonderful, dedicated builders and developers who carefully construct beautiful, quality properties. Their creations provide homeowners with places to live that are both showpieces and solid investments.

But unfortunately, not everyone builds quality homes. As a result, homeowners are becoming increasingly concerned about housing defects.

And with good reason. A homeowner's recourse may vary, and fixing defects can be expensive.

We live in a litigious society, and the truth is, even if you're doing solid work, things can go wrong -- other contractors can install something incorrectly, affecting your work; materials you thought were fine can end up being anything but; and sometimes, an overly-anxious new homeowner may not know if it's your fault or not.

Aside from doing honest, quality work, how can a builders protect themselves? Here are some tips:

• Make sure your company is known as a legit organization. The unfortunate truth is some builders have taken advantage of the system to underbid, build quickly and not guarantee their work. As a result, British Columbia is considering a new Homeowner Protection Act to ensure construction quality, after finding builders had reportedly used a local owner builder exemption to avoid getting the required mandatory warranty insurance or license, which also left the consumer at risk.

What can you do? Collect references so that you have some handy for new clients. Take photos of your work and consider putting together a pamphlet or Web site showing your past projects. PR can be a huge ally when establishing a solid industry reputation.

• Know What You're Responsible For. Courts typically categorize construction defects into four categories: design deficiencies, material deficiencies, construction deficiencies or subsurface/geotechnical deficiencies (which is especially important in California and Colorado, which both have varying soil conditions).

Know where your work falls. If you're working with an architect, make sure they're contractually liable for their work, as you are for yours. Confirm the land is solid enough to build on (or confirm it has been certified as such by someone else.) Make sure your materials are coming from a reputable source.

• Older houses have older problems. Keep this in mind when accepting remodeling jobs. "Older houses are more likely to have defects: plumbing, electrical, structural, roofing, anything," Tom Early, former president of the National Association of Exclusive Buyer Agents, told the Contra-Costa Times.

• Voluntary inspections can help safeguard you. Even if you've had the usual safety inspections, consider hiring an outside inspector to examine the property -- and agree to the buyer's suggestion to do so if it's brought up.

It's a trend that is growing: Some cities, like Hutchinson, Minn., are beginning to suggest inspections even for rental residential structures, with a charge for each unit inspected, in addition to any local fire and insurance inspections.

If an undisclosed defect is discovered after you sell the property, having had an inspection, you are less likely to be suspected of having concealed the problem, according to the Times. It is also important to hire a home inspector with a good reputation -- that will also imply you're not trying to hide anything.

Because after all, if your work is solid, what do you have to hide?

Will Your Mortgage Catch a Break?

Last week, the Federal Funds loan rate -- which determines banks' overnight lending rates -- was lowered to 4.75 percent.

The rate drop was designed to bolster the economy. Although consumer spending has remained relatively stable this year -- despite a credit crisis and continued housing decline -- banks aren't so sure it will stay that way. Plus mortgage defaults have risen, making banks leery about loaning to each other.

All that nail-biting nervousness is bound to seriously affect consumer attitude at some point, which is obviously a concern. Just look at the near collapse of Northern Rock, Britain's 5th-largest loan provider. Both the Bank of England and the government had to step in this month to bail out the strapped lender because panicked consumers refused to stop withdrawing their funds, the Financial Times reported.

The overnight rate in Britain shot up to its highest level in six years as a result -- not because money was short, necessarily, but because people suddenly doubted the security of the entire British banking system. Hopefully, with the recent Fed move and steady consumer spending, that won't happen here.

It's been almost a week since the big announcement. Time to check in and see: What effects will it really have?

• ARM Assistance -- Homeowners with 30-year mortgages won't see much difference. But adjustable-rate mortgage rates are affected by Fed decisions, so homeowners with very low-rate ARMs that are about to reset should see their monthly payments increase less than they would have before the rate cut. "It could mean a little less pain for the homeowner who is facing a reset on their adjustable mortgage rates," Greg McBride, senior financial analyst at Bankrate.com, told the Baltimore Sun.

• Prime Rate Reduction -- Last week, post Fed cut, a number of large banks -- Bank of America and Wells Fargo included -- cut their prime rate, giving their best borrowers a break in interest. Bank of America cut its prime rate  from 8.25 percent to 7.75 percent.

• Home Equity Credit Costs Controlled -- Those with home equity "open" lines of credit (HELOCs) will notice an immediate change because they are typically calculated by adding a margin to the prime interest rate, according to CNNMoney.com.

• Plastic Punch-Up -- Rates on credit cards should drop slightly, lowering minimum monthly payments, according to the Wall Street Journal. However, it's important to note that many credit card companies won't just offer you a lower rate -- many will only give one if it is specifically requested.

• Auto Action -- Current car loan holders won't notice a difference, but those seeking new car loans may get a better deal.

The rate cut takes time to affect the mortgage market -- and it won't help everybody. For one, homeowners already in serious trouble, facing foreclosure, aren't likely to benefit enough from the rate cut.

Secondly, homeowners seeking "risky" loans may have a hard time renegotiating their ARM. Lenders aren't touching those riskier markets. For many who are due for a large ARM reset, making the new, higher monthly payments may be the only option (aside from default and foreclosure).

But for the other homeowners listed above, more help may actually be on the way. The yield on Treasury two-year notes to almost three quarters of a point below the designated 4.75 percent funds rate has led some government bond traders to predict the Fed will lower rates again this year to boost the economy, according to Bloomberg.

Has the Fed's rate cut helped build faith in the U.S. economy? And will there be more cuts soon? Post your opinion below.

Rich, Famous and Playing the Real Estate Market

It's been a long, sobering week of anticipation and announcements from the Fed, from the Fed testifying to Congress, from news sources reporting the housing decline is still declining ...

But now it's Friday. So let's talk celebrities.

Or, more specifically, celebrity real estate. For the non-famous, buying property is a big decision.  Although an increasing number have second homes for vacations or other uses--The National Association of Realtors says 3.34 million second homes were bought in the U.S. in 2006, up 16 percent from 2005 -- it's unlikely we commonfolk are going to buy and sell property on a whim, or own several estates, or sell our homes more than once within a given year.

Not so for the stars! Take, for example, Dixie Chick singer Natalie Maines and her husband, actor Adrian Pasdar. The couple, who already have homes near Austin and New York, picked up a five-bedroom, seven-bathroom house in August in LA's Brentwood area when out there for a brief meeting -- reportedly on a whim. (It was a quick trip, but apparently buying an LA snowglobe at the airport just wouldn't satisfy their desire to shop.)

When you're famous, convenience is everything. The New York Post reported last week that Mariah Carey -- who owns a home in New York City's TriBeCa neighborhood -- is renting a condo in the Philippe Starck-designed 15 Broad St. building. (She also rented Tommy Hilfiger's Hamptons spread for $350,000 for just the month of August, according to the Post.)

Living in one house until retirement is a reality today's stars couldn't even begin to fathom -- but which are winning the real estate game, and which just appear to be on a fresh home frenzy?

• Speedy Seller: Paris Hilton just sold her house -- which is allegedly decorated with photos of her -- in a mere 10 days (and in today's market! In California!) for its full, $4.25 million asking price, according to Luxist. She bought it for $2.9 million in 2004.

• Lucky Landlord: Others, like Gisele, are renting out their unused properties when they're away. Gisele Bundchen's  1754-square-foot West Village penthouse loft goes for $29,000 a month, according to the Post.

• In Need of a Listing Agent: But mind you, that rental logic may not float outside of housing-cramped New York. Not everyone understands why a fabulous celebrity would need to pick up some extra cash by renting out real estate. Former boy bander Lance Bass was teased by blogger Perez Hilton earlier this summer when Hilton posted an alleged e-mail from Bass offering his California house for rent while he working in New York on Broadway.

• Ms. Many Properties on the Market: Other celebs, like Britney Spears, buy early and buy often. Brit bought a 9,000 square foot, $7.2 million Beverly Hills home last year -- but it's now been added to the list of things she's totally over. With 6 bedrooms, it was listed at $7.495 million in July -- for the second time (it was first put on the market in Feb.). Her Malibu house (because all celebrities need two homes in the same city) has also been on the market since November.

• The Clever Investor: Madonna this summer bought her sixth London property -- for £6 million, according to the Daily Mail. And what luck: It's right next door to her current London home! The 10-bedroom Georgian townhouse will presumably be joined with their current digs. Madonna also owns two other properties nearby for staff. She's been lauded with buying in London's Marylebone  area, which is said to show rising property prices that are still lower than some other nearby areas.

With capital to invest and a need for multiple homes -- celebs do often work on both coasts -- it's understandable why they'd be so into property ownership. It's also likely their investment team is heavily advising them about what to do and when to do it.

But, as some films and albums just don't pan out the way stars have hoped, real estate investments can have mixed results -- for you, for me and for our most famous celebrities.

And maybe it's wrong, but it's somewhat comforting to know in these troubled housing market times that a celebrity's house can sit on the market for months, too. Even if they are staying at a five-star hotel while they wait for it to sell.

The Global Green Argument: Who Will Voice the Debate -- and How?

Yesterday, we talked Dubai: Big growth, some Michael Jackson sightings and the fact it's considering going green.

But Dubai isn't the only global power looking to add some green to its geography. Several growing countries are making efforts to incorporate sustainability in their construction plans, including:

• India -- The real estate sector in India is growing 30 percent by 2010, to a $50 billion industry, according to Al Bawaba -- prompting green building talk. The savings and environmental impact are starting to register with the country, who in 2003 had only 20,000 square feet of green new construction.

• Australia -- In Australia, The Property Council of Australia and the Australian Conservation Foundation, made up of developers and conservationalists, are lobbying the government to add a nationwide program with financial incentives to improve energy efficiency in all new construction and pre-existing buildings.

Those are just two examples -- but a positive sign, since green building didn't exactly seem to be a global priority a few years back. Just ask Hewitt Associates' Bill Hewitt, an environmental advocate with an M.S. in international affairs.

"In 2005, there was an estimated $6 trillion in the value of new construction around the world," Hewitt wrote in a column for the Foreign Policy Association. "A relatively small proportion of that is in green building now, but projects and plans are mushrooming at a rapid pace"

The news has been dominated -- this week especially -- with news of the slowing U.S. construction market.

But in countries where growth is still strong, due to booming population or other factors, housing construction continues. And those countries, like Dubai, have a real chance to make an ecological impact by practicing green building principles.

Construction that involves responsible waste management and recycled building materials to create green buildings makes an immediate impact -- and the buildings, over time, will cause less of an impact on the environment. From water conservation aspects to using solar energy, the sustainable options are endless -- but who will encourage these emerging markets to build green?

Some international green organizations do exist -- notably the World Business Council on Sustainable Development, a CEO-led, global association of 200 companies from 35 countries that has support from corporations like Toyota, Royal Dutch Shell and Nokia.

The WBCSD's “Energy Efficiency in Buildings” (EEB) project is designed to make sure that by 2050, new buildings will consume zero net energy from external power supplies and will also produce zero net carbon dioxide emissions.

It's an ambitious goal. But, then again, consider that buildings use about a third of the world's energy -- and will use even more as the global population increases. If we continue along the current course, buildings will be the main users of energy by 2025, according to the WBCSD.

The group also reports that buildings account for 40 percent of energy consumption in developed countries -- as some of these companies develop more, that's a real concern.

To read more about the EEB project, click here -- and tell us what you think. How can an international organization -- the WBCSD or one like it -- convince a number of disconnected nations, with their own government and goals, that building green is a viable cost and ecological option? Or is it just too large a task to attack on a global scale? We want to hear your theories.

Going Green: A Good Idea Because People Do Buy in Dubai

Yesterday's MHN news included an item about Dubai, which is mulling over a green building policy that could significantly increase its amount of sustainable buildings (the area currently has three.)

What you have heard about Dubai may vary -- but you've likely heard that it's in the Middle East (true -- it's in the United Arab Emirates), has many wealthy residents (also true) and is somewhere Michael Jackson has been known to live (oddly enough, once again, true.)

Oil was discovered in 1966, and following the first exports three years later, Dubai began to economically expand -- fast.

That growth is still ongoing. Dubai is a key trade center for the Gulf region. And, according to Arabic News, its growth rate reached a new high of almost 17 percent in 2005.

• According to Dubai's Ministry of Planning, in 2001, Dubai's population was approximately 1,029,000. Last year, the population increased to 1.422 million from 1.130 million in 2005, according to the National Media Council.

That's 292,000 more residents -- 24,333 a month.

• It's no surprise that with all those new residents, real estate has been booming for the past few years. Some estimates place the total value of Dubai real estate projects over the next decade at $230 billion.

A booming economy and rapidly growing real estate market -- sound familiar? But don't look at the properties on your street that have sported "for sale" signs for the past six months and start saying "Dubai, I told you so" just yet. It doesn't look like Dubai's market is anywhere near a decline.

In fact, as population increases, the need for housing has been so strong for the past two decades, it has led to an unusual property market. 

Although some industry analysts expect that situation to change, many feel value and sales will remain strong -- including Simon Azzam, chief executive of Union Properties (UP), which was launched more than 20 years ago.

"Dubai's housing market is still at its infancy and it is very early to predict 'a bubble burst,'" Azzam told Gulf News. "The phenomenon of overpricing and overpromising will vanish soon. It will become difficult for a developer to sell his property at a price higher than its actual value. Certain areas in Dubai - based on location, culture and services -- will be appreciated better in the market and properties in such areas will get extra points by customers."

Right now, he says, the housing demand is so great, location is the only determining factor in sales.

"What is happening now is more of a mismatch," says Azzam. "All apartments on offer are going out at the same price regardless of specifications other than their area. This is wrong, and it is not going to last."

It's good news for sustainability fans that Azzam feels construction -- and UP's involvement in construction -- will remain high, considering his company is committed to building green.

Yet not every builder -- foreign or domestic -- is. Which brings us back to Dubai's Executive Council. If Dubai's Executive Council does decide to take on a green building policy, it could -- given Dubai's huge expected growth -- have an enormous impact on the area's environment.

And the area desperately needs it.

The Emirates may not be big, but the average Emirates citizen puts more demand on the global ecosystem than any other in the world -- in the world -- according to the World Wildlife Fund.

According to the WWF, using a scale that measures the amount of land needed to generate resources for one person, the UAE's ecological footprint measured 11.9 global hectares per person.

To compare, the U.S. has a measurement of 9.6 hectares per person and a global average of 2.2 hectares a person.

(By the way, I stumbled across this factoid in an article about Dubai receiving an ice lounge -- which is totally frozen, and located in a mall. Yeah, there's some money going on in that city.)

Not only can an emerging market like Dubai, leading by example, influence other similar markets to go green, a decision to adopt a green building policy -- given the area's high construction rates and upcoming housing need, as well as its global ecosystem impact -- seems like a must. Making the decision now to build sustainable structures can set Dubai on track for a financially and environmentally sound future. And given the amount of rapid growth in the area, that future seems to be coming faster than Dubai may have anticipated.

The council seemed receptive to the suggestion; we'll see if it passes. But Dubai isn't the only rapidly booming area to consider a green policy. More news on those growth hotspots to come later this week.

The Fed's Decision is In: What Does It Mean?

Just over an hour ago, the Fed -- for the first time since 2003 -- cut its benchmark interest rate by a half-percentage point to 4.75 percent.

The rate on direct loans to banks was also lowered by half a percentage point to 5.25 percent.

And yes, for weeks analysts have been anticipating a cut would happen. However, many thought it would only be a quarter of a point -- and the Fed had warned it would not act to bail out investors who had overextended themselves. Nothing was certain.

Taking all that into account -- and given that this is the first cut in several years, and that throughout 2007, despite the housing crisis, the Fed had maintained it was better to keep the rate as is -- this is pretty big news.

The Fed had good reason to take action. For one, inflation, which the Fed has said it viewed as its foremost concern -- part of the reason the housing crunch ended up on the back burner -- isn't posing as dire a threat as earlier anticipated, according to the Labor Department, who reported Tuesday its producer price index, a measure of wholesale inflation, had its sharpest drop in 10 months in August.

But even if the good inflation news hadn't been released Tuesday, it's likely the Fed still would have lowered the interest rate due to market changes.

As the Federal Open Market Committee said today, the change came about as "developments in financial markets since the Committee's last regular meeting have increased the uncertainty surrounding the economic outlook."

"Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally," The Fed said in a statement. "Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."

That's a marked change in attitude from the Fed, who had previously de-emphasized the housing decline and resulting credit crunch -- but both have indeed worsened, along with unemployment, since the Fed last met.

In addition, the whole mess has all shown global repercussions in other countries' financial markets.

But what does this all mean for the economy?

The immediate effects:

• The dollar fell to a new low against the euro, $1.3980 today.

• Major U.S. stock indexes rose sharply right after the announcement, according to BusinessWeek.

Potential changes in the near future include:

• Banks were expected to immediately cut the prime rate, base rate for many business and consumer loans, such as home equity lines of credit and credit cards, from 8.25% to 7.75%, according to USA Today.

• Adjustable-rate mortgage rates could possibly fall, but the impact today's announcement will have on ARMs may not be large as they are also based on other interest rates. (Since Treasury yields affect fixed mortgage rates, the cut will likely have less of an effect on 30-year-mortgage holders, USA Today says.)

Today's news pleased many in the housing market. But of course, the housing crisis is far from over.

This is, in fact, quite a big week for U.S. Federal Reserve Chairman Ben Bernanke: On Thursday, he will testify about the current mortgage situation to a House Financial Services Committee. The committee members have made several suggestions -- some in opposition to Bernanke's assessments -- about how to correct the situation, CNNMoney.com reports.

What will they suggest? How will Bernanke defend the Fed's previous and recent policy decisions? Stay tuned to MHN Out and About for continued coverage.

But What If It Doesn't Happen Tomorrow?

Last week, we discussed some of the reasons the housing crisis seems set to continue through the next year.

Many in the industry are waiting to see what the Fed announces tomorrow in regard to the interest rate: The federal funds rate has been kept at 5.25 percent for months. There's speculation it will be lowered Tuesday.

If the Fed does lower the rate, it's not going to fix things immediately. And if the Fed doesn't, well -- it might be time to start looking at what we can do to correct our industry.

But what can we do? Some thoughts:

• Reduce home inventory. With a surplus of homes on the market, sellers are facing too much competition to sell their homes near the asking price -- or in some cases, at all. (Hence -- Former chairman of the Federal Reserve Alan Greenspan's statements over the weekend to the Financial Times warning homeowners to expect prices to fall further.)

The current housing supply needs to be cut before we expect home prices to increase -- or for there to be a need for new home construction.

Which is why it might make sense for home builders to help get the market moving, however they can. In Atlanta, housing inventory is high -- in North Atlanta has a 10.5-month supply and South Atlanta has a 9.8-month supply, according to market source Metrostudy.

It's led some Atlanta builders to make changes to correct the housing situation, offering aggressive buyer incentives and reducing prices to cut existing home inventory, according to the Atlanta Business Journal. Although it's too early to see the full results of their reaction, it could prove a good start.

Hopefully the builders' efforts will have an effect: There isn't much time to lose, since Georgia's community banks are among the nation's most vulnerable because of a reliance on construction lending, Metrostudy reports.

• Wait it out. In some areas, taking immediate action to lessen the housing supply may not be needed -- the continued construction slowdown, while economically painful, may do the trick.

The National Association of Realtors thinks the housing slump will continue past 2007 -- but because of new construction declines, the NAR thinks it may actually lessen, according to the Miami Herald.

The group projected new home construction will fall to 1.37 million this year and 1.26 million in 2008 -- but labeled that as a "healthy trend" that would help adjust the already bloated new home inventory.

Are those the only possible solutions? Nope. Are they guaranteed to work? Not at all. But as the housing situation worsens, we're all looking for answers. We'd like to hear your thoughts on how to correct the situation.

The housing slump wasn't caused by one person or industry group -- and in reality, it can't be fixed by just one, either. But the longer the industry sits back and wonders who will step in to correct the problem, the bigger it gets.

We'll see tomorrow if the Fed feels the same way.

Is This Land Your Land, Or Is It My Land?

Donald Trump is known for his high-quality, innovative buildings -- but some New York City preservationists are claiming he isn't known for his communication skills.

They're upset that Trump didn't approach neighborhood residents about his planned 46-story Trump SoHo, planned for -- you guessed it -- SoHo. The building was announced last year on "The Apprentice."

"Every other developer comes to us and says, 'We're going to build a building. What do you think of it?'"  Sean Sweeney, director of the SoHo Alliance, a group that seeks to maintain the character of the artsy neighborhood, told the Associated Press. "Trump didn't come to the community. People in California heard about it before people in SoHo did."

And although it may sound a little unrealistic to imagine Donald Trump going door-to-door in SoHo to hug residents and tell them all about his exciting plans to build in their neighborhood, they do sort of have a point.

SoHo is one of New York's most unique neighborhoods -- it has worked to maintain a sense of personality in the face of decades of rapid urban growth.

Its residents have been known to protest out-of-place neighborhood additions. Take, for example, the 17-story Far West Village condo complex, created by artist Julian Schnabel. The Greenwich Village Society for Historic Preservation tried to prevent its construction because of its height in relation to other area structures, according to the Real Deal.

Imagine their reaction when its construction tarp came off in June, revealing that the building was hot pink -- I mean, really hot pink.

And huge.

Size Matters

Likewise, many of the buildings in SoHo are just 10 to 15 stories -- a far cry from the new Trump structure. He's not breaking any laws -- AP reports the construction site, a former parking lot, is zoned to accommodate the building's height.

But still -- it is a developer's responsibility to consider a project's impact on the surrounding neighborhood? Or is that just a sign of progress residents must learn to live with?

There is an interesting caveat to the situation.

One, although the zoning allows for a 46-story building, it doesn't permit a residential one -- which is being sidestepped by packaging the building as a hotel and not a condo, AP reports.
It will be a condohotel -- a variety Trump is also currently constructing in Chicago. I interviewed his son, Donald Trump Jr., about that project a few years ago.

The condohotel first entered the Trump world in 1997, when Donald Sr. was looking for uses for a very specific, commercially zoned portion of the Trump International Hotel and Tower. Donald Jr. told me it was his Dad's idea.

Whether or not you agree with the SoHo Alliance, you have to admit -- it is a pretty clever idea. They were able to build as desired within the current zoning laws and give residents the added bonus of possibly making money off their condos when they were not in use. Plus residents get the benefits a hotel can offer -- housekeeping, a function center, etc.

But calling the Trump SoHo a hotel really has the SoHo Alliance steamed.

No owner can occupy a Trump SoHo unit for more than 29 consecutive days in a 36-day period or for more than 120 days a year; it would require a lot of shuffling around to get out of that. If it's enforced -- and the Alliance thinks it won't be, calling the rules "a mechanism that's simply not going to be followed."

The Hammers Keep Hammerin'

Their attorney asked the city Department of Buildings to revoke the Trump Soho's permit in a July; the request was denied on Aug. 14.

The Alliance isn't done, though -- they plan to appeal and may file a lawsuit.

And yet, construction is underway. So who's right? And who's wrong?

Homeowners -- especially urban ones -- pay a lot to live where they live. As such, they have a valid concern in how the neighborhood develops. For one, they own stake in it, via their property, and therefore it could be concluded that they have a say in its future.

Also, more importantly, neighborhood development affects their investment -- and as homeownership is the largest investment many Americans will make in their lifetime, home prices rising or falling as a result of positive or negative changes in the area will have a direct bearing on their financial future.

The SoHo Alliance is afraid if this big building gets built, it will be a shining Bat symbol in the sky, calling to other developers to add super-structures to SoHo.

"If he gets away with it," Sweeney told AP, "there'll be a tsunami of residential buildings."

And yet, Trump didn't break any rules. They're arguing he may have bent some (in Chicago's upcoming Trump condohotel, I was told, there would be no limit to the amount of owner use -- the SoHo condohotel set rules to limit permanent residency, which likely was done partially to define the building as nonresidential), but he did it within the framework of the law.

That, however, won't change the building's height. And does it even matter that the building going up may be one with condos -- who is to say a developer wouldn't have constructed an office building of the same height on the space if Trump hadn't procured the spot? If the land is there -- empty and available -- it's fair game, isn't it?

Or is it?

Uncertainty Looms (Along with Doubt) for 2008 Residential Market

Perhaps you've noticed recently that many residential industry insiders have started saying that they're expecting the current housing slump -- which already seems like it's been going on forever -- to last through a good chunk of 2008.

Not long ago, many of those same sources were expressing hope the crisis would start a turnaround later this year -- and true, it's September, but there's still time (and room) for improvement, right?

Read the news -- and the numbers -- and you might think otherwise.

There are quite a few reasons why the housing industry is now looking toward 2008 for things to improve, including:

• Home sales are still down. On Tuesday, the National Association of Realtors officially forecast a 24 percent decline in new home sales this year and anticipated sales would fall from 801,000 in 2007 to 741,000 next year, according to the Associated Press. That would be the seventh consecutive month of lowered expectations from the NAR.

And, although the NAR's last monthly forecast said home prices were expected to rebound with a year-to-year rise in early 2008, on Tuesday it said the existing home market would see flat prices in the first quarter of 2008, according to CNNMoney.com.

• Businesses are still attributing profit losses to the residential market. And they're showing little faith the situation will improve. Take, for example, DuPont, which (among other things) manufactures residential and commercial construction materials. In late July, the company told investors it expects the housing slump that had damaged its second-quarter results to continue for several more months, according to Reuters.

The company was "not assuming anything improving in North American housing until sometime well into 2008," Chief Executive Charles Holliday said.

• The financial market is feeling the burn. Residential sector stocks set new annual lows this week, according to Dow Jones.

Net orders for homes fell 21 percent in July 2006, more even than the 10 percent decline in new home sales reported by the Commerce Department, Majestic Research analyst John Tomlinson reported his data showed. Tomlinson also said year-over-year net orders have angled down since July 2006, Dow Jones reported.

The home-builder stock decline has also negatively affected some well-known large mutual fund managers -- including Legg Mason's Bill Miller, Harris Associates' Bill Nygren and Fidelity Investments' Tim Cohen -- who had bought the stocks, hoping they had hit bottom, according to Reuters.

• The world is watching -- warily. The Organisation of Economic Co-Operation and Development (OECD) said it expected the U.S. housing crisis would last longer than previously expected on Sept. 5 when giving gave its spring/autumn mid-point projections.

OECD also expressed uncertainty when about its predictions for the world's 30 richest countries because the housing crisis' effect may not yet be fully known.

• Everyone is still wondering if the Fed will lower rates. And now, we come to the perhaps most discussed reason people are looking toward next year for residential market improvement. Ah, the Fed.

For months, the Fed has kept its federal funds rate -- the overnight bank lending rate that affects credit card, home equity and other loan rates --steady at 5.25 percent, expressing more concern about inflation.

However, the Fed noted in August that "financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing," CNNMoney.com reported.

And, following suit, for months industry analysts have been buzzing that the Fed will lower rates before we hit 2008. Lately, there's been significant buzz that the Fed will lower its benchmark interest rate at its Sept. 18 meeting next week.

If the Fed steps in, things won't get better overnight -- and it's not a magical solution. Still, lowering the interest rate would be huge.

A lower interest rate can positively affect credit rates; holding steady could potentially cause more credit problems than the U.S. is currently experiencing. Increased credit issues are eventually going to vastly hurt U.S. spending, investing, business growth and more -- putting our entire economy at risk.

Surely the Fed is mulling over all those concerns as it prepares to meet -- and possibly lower the interest rate -- next Tuesday. Will it happen? We'll be watching.

More of the Housing Slump Means More Empty Pockets

Earlier this week and late last week, we touched on some of the New Yorkers who are being inconvenienced -- and even possibly priced out of the city -- due to the rising rental rates.

Even though residential construction is doing well in the area, there is still a rental housing supply shortage. And as more people clamor for less apartments, prices are skyrocketing.

As a result, some reports put the amount many New Yorkers are paying in rent as 50 percent of their salary. Ouch.

Yet New Yorkers aren't the only ones feeling the sting of housing costs. While the rest of the country may not be trying desperately to pay high rents (although homeowners dealing with rising mortgage rates  can probably feel their pain, as the kids like to say), the current housing slump has had a rough effect on many citizens' livelihood.

Some groups struggling financially as a result:

• Illegal Immigrants. The housing decline has greatly affected illegal immigrants this year. Reduced painting, tile laying and roof building jobs have caused immigrants to reduce the amount they send home -- causing the first year-over-year monthly declines in remittances to Mexico in 12 years, according to Banco de Mexico.   

The Houston Chronicle recently reported that only 64 percent of Mexican migrants sent money home in the first half of 2007, compared with 71 percent last year, according to a study released Aug. 8 by the Inter-American Development Bank's Multilateral Investment Fund.

• Construction workers. In Massachusetts, the housing market decline created thousands of construction-related job losses across the state -- but multifamily, office and other construction projects have helped meter the impact, according to the Boston Herald. In California, the state Employment Development Department reported that unemployment rose a tenth of a percent in July to 5.3 percent. Construction was cited as the cause: And given 7,800 were lost in a month in California, that's a correct assumption.

And, the Sacramento Bee reported, the housing decline-related issues -- such as construction layoffs -- are having an effect on the economy: California retail employment dropped by 3,800 in July, which the Bee attributed in part to consumers cutting back on spending because of housing-related issues.

• Since we're talking retail, it should be noted that the retail industry hasn't had it easy, either. Although August's industry numbers were slightly (and unexpectedly) up, some retailers still posted losses. Kohl's Corp. and J.C. Penney Co. Inc. had lower monthly sales of 0.6 and 4 percent, respectively, according to Women's Wear Daily.

Kohl's has 68,500, according to Fortune. JC Penney has 151,000. Potential layoffs at either company are likely to effect the economy. (However, since both stores rebounded with higher quarter sales in August, that's hopefully not going to happen.)

Increased interest rates, reduced work and inconsistent consumer spending is cramping the economy.  And, like the New York rental market, it's a question of supply and demand -- too many houses in supply and not enough demand to buy or build more.

The outcome is touching so many parts of our economy and affecting so many industries. Is this really still a situation we're going to wait out?

Residential Woes: California Isn't the Only One Crying

One of MHN's daily news items today -- Northern Calif. Area Has Worst Housing Market in a Quarter Century -- touched on California's continuing real estate problems. The state was one of the hardest hit in the recent housing slump because it was one of the fastest rising in terms of property value and new construction a few years ago.

The higher the climb; the harder the fall.

But, of course, California isn't the only U.S. area that's seen home prices skyrocket and then plummet. An interesting article today from NuWire, a Web site featuring interviews and articles written by investors, touches on some of the most overdeveloped (their phrase not necessarily ours--we'd go with "in need of a correction ") areas in the country.

The article identified the following locales:

• Vegas, Baby, Vegas. The gambling oasis went from high roller status to bust. During 2005 and 2006, more than 72,000 residential construction permits were issued, according to NuWire. Which is too bad, because home inventory shot up to a new high this June -- 40 percent of which are vacant -- and new home sales this year through May were down 43.8 percent from 2006.

Condos are lingering on the market for a whopping 335 days, according to a National Association of Residential Real Estate Investment Advisors advisor.

• Phoenix. Love the dry heat, don't love the housing situation: The Phoenix area gained 696,000 new people from 2000 to 2006 -- more than anywhere else in the U.S., according to the Census Bureau. But wait! That's still not enough people to fill the area's homes.

Their vacancy rate rose 2.1 percentage points between 2005 and 2006, NuWire reported -- and that's back when the market was better.

• Orlando. Despite its longtime status as a family vacation destination, Orlando has the highest homeowner vacancy rate increases of any city in the nation -- 5.2 percent. Home sales in the area fell by 42.65 percent in 2007 from 2,361 last summer to 1,354 this July 2007, according to NuWire.

In addition, condo sales dropped 64 percent during the same time period, and 40 percent in August, the Orlando Business Journal reported.

• Miami. The homeowner vacancy rate jumped up to 3.4 percent in 2006, according to the U.S. Census Bureau. Condos are selling for half their purchase price, NuWire says.

Florida's market has had a hard real estate year. As a result, Coldwell Banker just restructured its entire Florida operation, reducing its eight regions into two offices to cover the state, Miami Today News reports.

• West Palm Beach, Fla. It's taking 152 days to sell a Palm Beach property -- so says ZipRealty, a California-based real estate company.

The median price of a previously owned single-family home in Palm Beach County declined 5 percent in July, falling to $372,200 from $390,100 in July 2006, the Palm Beach Post reported.

Stay tuned to MHN Out and About for future updates on areas affected by the housing slump.

More Money, More Problems for New York Real Estate Market?

On Friday, we discussed some reasons New York's condo market seems bust-proof.

As rates fall across the nation, New York new residential construction remains strong -- and prices are higher than ever.

But high-end market condo prices aren't the only rising costs. Just ask any Manhattan renter.

The Wealthy New Yorker Tradition

In a city in which low vacancies and a high number of residents mean rent can easily push past the $2,000 mark, purchasing a place -- even an expensive one -- may not seem like quite such a stretch.

Buying a really expensive apartment instead of renting one may not seem like a logical choice for everyone. It's one made easier for high-income earners.

And one thing is clear: New York is home to some serious cash. Bill Fuhs, president of the New York Private Bank and Trust, estimated that in 2001, about 27,000 families in the U.S. had a net worth of more than $30 million; the New York Times estimated up to 10 percent of them lived in New York.

Even New York's non-wealthy are doing better than the rest of the country (which is a good thing, considering the cost of living is higher). The average salary for a New Yorker worker was $48,980 in 2006. The median U.S. salary in 2006 was $33,634.

Many, Many New Neighbors

Lots of new condo real estate and lots of money to spend on it: Sounds like the perfect situation. However, even a strong sales market can pose problems.

New York is growing. It's estimated to have nearly another million people by 2030.

Remember those uber wealthy New Yorkers? According to the New York Times, the top 1 percent of New York earners supports about 153,000 service jobs in the city. As the wealthy flock to the city, more service industry workers will, too -- more high-earning New York citizens means more jobs for them.

But concern that New York's lower-income workers and any new residents who aren't wealthy -- or even pulling in that $48,000+ average -- will be priced out of the city is a real threat.

As rents rapidly rise, New York may become an unmanageable place to live for many. The New York Times reported last year that affordable rents for moderate income households (including New York police and firefighters, both of which typically make under $40,000 a year when starting out) dropped 17 percent between 2002 and 2005, according to a report by researchers at New York University.

The Times also reported that two out of every five New York City households earn $32,000 or less. (Which makes the Mayor's office estimations that a third of NYC renters pay 50 percent or more of their salary to rent seem suddenly understandable.)

Gotham Gets a Plan

New York is well aware of its existing housing issues. And the city is stepping in.

Mayor Bloomberg's widely touted PlaNYC was designed in part to create sustainable, affordable homes for the million incoming residents. The plan says New York must add housing for 500,000 people over the next decade so that the population hopefully won't rise before housing options do.

That would, after all, increase demand -- and rent prices -- further.

Another thing abundant in the Big Apple? Reasons to move there. New York will always offer unparalleled job opportunities for those in the media, entertainment and finance industries; it's still known for its glamour and glitz and 24-hour nightlife.

As a result, people will always want to live in New York -- so life in the Big Apple isn't cheap. It's the simplest economic theory -- the demand for living in the city is high; the supply of housing, not so much.

For New York's financially upward, housing may not be a pressing issue as new condos continue to hit the market.

Over time, PlaNYC will hopefully alleviate some of the financial difficulties lower-income earners face finding housing in New York. If effective, it will ward off a real housing crisis for those facing low incomes and high rents.

Middle-class earners close to the salary average, however, will likely still have to dedicate a large chunk of their salary to rent. But that challenge and sacrifice, in a way, is part of the deal to live in New York. And New York is upfront about it. It's a busy city, it's a cultural city -- and it's an expensive city.

Living in New York invariably will include finding somewhere affordable to live. It isn't easy. Even with the additional housing being built over the next 10 to 15 years, housing is likely to still be expensive, tight on space and highly competitive to get.

As Frank Sinatra sang in "New York, New York," if you can make it there you can make it anywhere. And that's all true. It just seems Sinatra left the line about finding a rent-stabilized apartment out of the song. Possibly because he couldn't find one. 

Why Is New York Condo Crash Proof?

This year has not been a good one for most U.S. residential construction markets.

Kansas new home projects were 50 percent lower in June than they were a year ago. In Ohio's Dayton area, residential contracts dropped by 38 percent in July.

Northwest Arkansas saw a drop in residential building permits in the second quarter of 2007 -- 56 percent less than in 2006,  according to the Arkansas Business.

Yet, as different parts of the country report weakening housing markets, news of New York's strong residential sales continues to spread.

New York City will reach its highest construction spending mark in years by racking up $24.6 billion in construction spending in 2007, according to New York Construction.

Take, for instance, Harlem, which is one of New York's growing neighborhoods. Seven years ago, Harlem was undergoing a rebirth -- new stores, properties and businesses like Old Navy moved in.

But the residential market was rising even faster. Roughly 4,300 free-market condos have been developed since 2000; 1,600 units are planned for this year, according to the New York Sun.

And they're getting pricey: The average price per square foot for central and east Harlem condominiums rose 39.5% between 2005 and 2006, the biggest increase for any neighborhood in Manhattan, according to a recent study by the appraisal firm Miller Samuels.

"New York's condominium market continues to be cited as the exception to the rule in terms of national housing markets," the managing partner at Massey Knakal Realty Services, Shimon Shkury, told the Sun.

So what gives?

• Limited space means unlimited demand. New York is, after all, an island. There's only so much room, and there is a large supply of people who want to live there -- which has resulted in low vacancy rates.

As such, the rents have increased between 2002 and 2005. The number of unsubsidized apartments, including rent-regulated apartments, renting for $1,000 and $1,200 a month rose by 58,000, or nearly 34 percent; the number renting for $1,200 to $1,400 rose by 57,500, or 52 percent, according to the New York Times.

• The high-end market in the country's biggest city always holds some attraction. As mentioned in Wednesday's blog, units near Central Park -- long considered one of the premier addresses in the Big Apple -- are selling for record amounts of more than $3,000 per square foot.

• With rents increasing, buying makes more sense. "Many renters found market rate rent increases so substantial that their preference in the 'rent-or-buy dilemma' quickly changed to buy," Shkury told the Sun.

New York is a unique place to live -- and, as such, a unique residential market. As such, condo sales are strong.

But for many of the same reasons -- escalating prices, low vacancy rates -- renters can be left out in the cold. (Sometimes literally.)

Curious about how renters are faring in this rah-rah residential environment? Check the Out and About blog on Monday for part two of our look at the New York residential market.

How Grandpa Just Might Save Your Property Value

As the residential market slows ... and slows ... and slows ... we continue to hear reports of various cities and areas that are experiencing unusually solid housing sales.

But these neighborhoods aren't the only sector showing housing growth. Other subsets of the population remain strong prospective buyers.

For example, first-time buyers will still, in some varying degree, take advantage of interest rates before they really rise, as they are predicted to do. Still, first-time buyers alone likely won't move the market back into its previous robust state.

However, one category is poised to be a huge influence on the residential market in the coming few years -- and it's one that's frequently forgotten. But as census research shows, that's about to change.

Behold: The retiree. By 2026, the population of Americans ages 65 and older will double to 71.5 million, according to the American Association of Homes and Services for the Aging.

While some seniors will opt to stay in their current homes, many of today's seniors are looking for active, exciting retirement options, and they're looking at housing that can support a lifestyle as much as it can offer a place to live.

What impact will these Baby Boomers have on the housing market? Some points to consider:

New Phase of Life, New Neighborhood

Downsizing is an attractive option, which has led to the creation of dozens of senior "active living" communities across the nation, offering housing to those age 55 and older.

And that has positive implications for the residential construction community. Most senior homes are designed with older residents in mind -- they're typically one level, eliminating the need for stairs, feature open floor plans and a myriad of social and entertainment options within the complex.

Companies like Pulte Homes, which owns the popular Del Webb brand, has built nearly 500,000 homes in the U.S. in the past five decades. From Arizona to Arkansas, there are pre-built communities being developed by a variety of companies offering reasonable housing, activities and community centers that can include a pool, recreation center and other options.

And more retirement communities will likely be built as the Baby Boomer generation ages. About 19,000 people a day are turning 55, according to David Robertson, past board chairman of the American Association of Retirement Communities.

"And that is still a significant trend," he told the Star-Telegram. "We have not even begun to see even the crescendo yet."

Jim Rosenberg, a Myrtle Beach-area developer, told the Sun that his company is tracking the Boomers' moves because, although the housing market is sagging now, when the oldest Boomers begin retiring in the next few years, they're going to need somewhere to live. (And given that a recent National Association of Realtors study says 42 percent of them want to retire to the South, Rosenberg stands to do well if they follow through on that plan.)

Seniors Aren't All Moving to Florida Anymore

Location plays a part in Boomers' retirement plans. Travel is easier and less expensive than it was 30 years ago, and as a result, today's retirees don't feel compelled to retire in their current home -- or in one location.

Many purchase retirement homes and second summer homes, spending part of the year at each. Some relocate to an entirely new place, looking for a change, confident they can travel often or easily relocate if it isn't what they'd hoped. Some return to or for the first time opt to live in urban environments, due to their convenience factor and vibrant entertainment options.

AARP magazine covered the trend, publishing a list of the top five retirement cities.

"City living may cost a bit more, but urban communities also deliver peak value in the form of culture, work options, mass transit and fitness opportunities, and this year's selections really cover the spectrum," Steve Slon, editor of AARP The Magazine, said.

AARP's picks, selected for their smart growth, mixed-use nature, easy living standards and urban options like public transit, are:

• Atlanta: Selected for its volunteer and cultural options and range of housing types.

• Beacon Hill in Boston: Offering a plethora of history, Beacon Hill Village provides a service for older residents that will arrange transportation, healthcare and entertainment.

• Chandler, Ariz.: The dry heat climate and ample open space offers recreational opportunities for residents, and local activism offers social options.

• Milwaukee, Wis.: Seniors can utilize this Midwestern city's lovely river walks and affordable waterfront housing.

• Portland, Ore.: Retirees who want to go green can likely find sustainable options in this eco-friendly city, which is home to many bike lanes and a redone downtown district.

But Before They Pack, They Need to Purchase

The vast amount of aging Boomers is great news for the housing market, but how much of an impact they will have -- and when -- still depends on a number of factors.

• For Sale ... Still. While the construction industry stands to gain from the Boomers' impending retirement and increase interest in retirement communities, that's contingent on them being able to sell their pre-existing homes.

And if the market stays lax, retirees may opt to hold on to their home until sales improve, delaying    entry into a planned community -- and delaying the need for new construction. That trend may have  already started. Del Webb's parent company, Pulte Homes, as of June 30, had sold 1,771 homes in its Southeastern retirement communities, excluding Florida -- 225 fewer homes than it sold in the first half of 2006, the State reported.

• Housing Supply Overload! In addition, residential mobility is going to be affected by the market. If the Boomer bunch moves into retirement homes and stays indefinitely, that's likely to be felt in the market, which for years felt the influence of this large population group upgrading to more expensive homes and relocating to different cities.

And, considering many Boomers are at the top earning point of their career and have either bought more expensive homes over the years or stayed in one that has appreciated greatly due to market increases, Boomers moving into less expensive retirement homes will add a number of higher-end homes to th e market -- which is already oversaturated.

Boomers have a myriad of choices facing them when they retire. Will they stay at home? Buy a new ranch house in a retirement community? Buy a condo in their favorite vacation spot?

And, although the real effects are a few years off, their decisions will undoubtedly influence the residential market. It's too early to bank on any upswing -- but it's not too early to consider this group's influence. One retiree isn't going to alter the market; but the 19,000 people who turned 55 today? In 10 years -- or less -- they just might.   

Putting Properties in Their Place

Location, location, location: The old saying about what's most important in  real estate has never held truer than in today's tough market.

Residential property spending has been dropping for months (the average U.S. home sales price dropped from $322,100 in the first quarter to $310,000 in the second quarter of 2007, according to the U.S. Census Bureau.). New properties have stalled on the market, causing many developers to postpone or cancel upcoming developments.

But some residential projects are selling -- well -- and location plays a big part in their success.

The Big Apple Goes Crazy for the Great Outdoors

New York's residential market is faring better than most, but it's still amazing to consider residences near New York City parks are selling at considerably high prices, according to The New York Sun.

• Apartments next to parks in Manhattan and Brooklyn are selling at premiums of at least 25 percent.

• Properties near New York's famed Central Park are selling for record prices, in some cases for more than $3,000 per square foot.

New York is no cheap place to live -- so it stands to reason residents expect prices to be higher. But $3,000 per square foot? When you've got something to offer residents that they can't get anywhere else -- be it a penthouse or a park view -- as New York's real estate market is finding, they'll pay.

Young and Older Generations Do Downtown

Despite the housing slump, data indicates that in many cities, buyers are still interested in urban properties. As single-family home prices drop across the board, condos are faring well in several markets:

• Salt Lake City condo prices grew by 25.6 percent this year.

• Albuquerque condos shot up 17.9 percent, according to CNNMoney.com.

One key reason: With mean prices of $147,100 to $164,600, the units are still affordable (at least more than single-family homes are) and appeal to first-time buyers or older residents who can benefit from a city's walkability, dynamic nightlife and public transportation.

The Best Place to Be: In Between Everything

Convenience can also be a factor in residential location-based success.

Consider Greer, S.C. The area's population has more than doubled in the past 15 years and its real estate market remains stable in the face of a national housing slump, according to the Spartanburg Herald-Journal.

A few reasons why:

• Locals say location makes Greer an attractive spot to settle: It's off I-85 and near large employers BMW and Mitsubishi, allowing for an easy commute and proximity to two cities, Greenville and Spartanburg.

• Greer also offers a variety of housing, giving everyone from first-time buyers to retirees looking for a summer home options.

We may not hear about it often, but there are some strong residential sales going on in this otherwise lackluster year for housing.

True, that doesn't mean every downtown condo will sell. It doesn't imply that all developers should rush off to create new communities off interstates.

But it does show a few glimmers of hope for the market. With the daily housing news getting more and more bleak, it's easy to write the whole industry off -- but it's important to remember that this is a downturn, and while it affects the overall market, it isn't eradicating it.

Certain areas and developments will continue to sell well. Others won't. Know about an area that's booming or one that has gone bust? Post about them here on the Out and About blog -- and watch for future posts about housing market holdouts. 

Why We Should Feel Better About Today's Industry Reports

The long weekend is over -- and we're moving from Labor Day to bad labor news, if you're a member of the residential building workforce.

The Commerce Department announced today that residential housing spending again declined in July, falling 1.4 percent -- the sharpest drop since January.

Residential spending has now fallen 15.6 percent from July 2006 to 2007 -- a situation that is even more serious considering that residential spending had actually fallen consistently before that period, for a record 17 consecutive months, according to Forbes.

And ... it's widely expected to decline further before the year ends.

Yet residential sector investors and workers aren't the only ones grimacing anymore. In July, the intense residential drop caused overall construction spending to fall 0.4 percent.

Non-residential construction had long supported the construction industry, offsetting much of residential's decline. Today's released results indicate the residential sector is really starting to bleed into construction as a whole, and as other sectors start hurting, there's concern that the economy may follow.

Whispers about a possible recession have been rampant in the industry for months now --but did today's announcement indicate that all hope is not lost?

• The Commerce Department reported that government construction spending actually increased -- by 0.7 percent. The Wall Street Journal reported that state and local spending rose 0.8% to $269.6 billion in July. State and local building spending is typically significantly greater than federal construction; to see a positive increase in local spending is a good sign.

• U.S. manufacturing expanded at a slower pace in July, but activity was still high enough to indicate positive activity in the sector. The index of manufacturing activity, created by the private research study group Institute for Supply Management, was 52.9 in August, compared to 53.8 in July and 56.0 in June, according to the Wall Street Journal. That's significant, considering the index considers any reading over 50 to show an expansion of activity -- indicating this sector is still showing healthy performance.

• Increased jobs imply a strong, possibly rising, economy. ISM also reported that factory hiring increased in July, with an employment index of 51.3, up from 50.2 in June.

The manufacturing industry's influence should not be understated. The sector accounts for 10.8 percent of all U.S. employment, according to the U.S. Department of Labor. Manufacturing also employs 61 percent of workers in the good-producing sector -- which includes construction.

Manufacturing activity has risen from 34,240 in July 2006 to 36,569 this past July, according to U.S. Census Bureau data. If manufacturing has been able to stay strong despite the continued downward spiral of the residential market -- and drops in other construction areas such as private-sector construction, which fell 0.7 percent in July and 0.2 percent in June -- it stands to reason the construction industry, and the economy itself, may weather this storm.

It's not over yet -- we're all still looking for the sun on the horizon. But seeing one part of the economy -- one that can really indicate economic growth, or the lack thereof -- solidly maintaining itself offers some hope on an otherwise bleak Tuesday. (Makes you wish you were back at last weekend's BBQ, doesn't it?)

Online Property Adventures

I had dinner the other night with my Realtor -- who expressed a strong dislike for a number of sell-it-yourself Web sites (and also gave me all the neighborhood gossip).

Which got me thinking -- of all the real estate Web sites, which measure up?

Newsweek recently had an interesting breakdown. Check it out for comparisons.