Layoffs and closures are never fun. Many people lose their jobs and the good that the company could have done for an area turns into nothing more than a vacant lot. However, Pardee Homes has, so far, stayed committed to the region with plans to develop when the market is healing itself. With a recently reported 8.5 months worth of new homes available for sale on the market, the last thing we need is for builders to keep going, even if they are making some kind of profit. The sooner we fix the over supply problem, the sooner the market can recover.

A large factor in the whole housing crisis has been shifty dealings in selling homes and subprime mortgages. Lenders and builders have put themselves in a desparate situation, and dishonesty is likely to occur when builders keep adding to the over supply and the pressure to sell. This is very bad for the market and will only bring harsh ramifications for the buyers and the sellers. So good job Pardee. You made a tough decision, but a good one.

On a hopeful note, the lending business is under stricter scrutiny and legislature is in the works to force a higher standard of ethics. The credit crisis (lenders inability to lend due to an inability to collect) will still see darker days before any improvements, but positive government influence could very well turn the tide. Now, if only we could get these big publicly owned building companies to slow down a bit more…

Consumers have a lot to do with the current situation. After all, we ultimately control the economy. Hasty decisions about mortgages and the urge to build bigger and better have combined to create a foreclosure rate that is currently 50% higher than two years ago. Reported “ghost towns” have begun to develop and values are dropping.

My suggestion… First, don’t depend on the banks to be honest about your mortgage. Read the fine print. Consult a neutral third party if you must. Make sure you are aware of any variable rates and possible rate spikes. Second, don’t build so big. Build smarter. Find a good plan and customize it, or hire a designer. Spend more on planning and less on mistakes. Third, go green. If you want to save money in the long run, and be able to afford those mortgage rates, then start with energy saving products and building techniques. Here is a great resource: www.greenandsave.com (look for the ROI, or Return On Investment, numbers). Another: www.buildinggreen.com (these guys don’t accept advertising, so they’re great).

You may have a dream of owning your own home. Not buying an existing one, but owning one built just for you. The ‘crisis’ doesn’t change that. You still can. Just play it safe and build smarter. You’ll obtain your dream and support the market. After all, you ultimately decide your own economy.

source: The Associated Press used by Fox News – http://www.foxnews.com/story/0,2933,302194,00.html

Alex Wilson, author of “Your Green Home,” states “The average US home has more than doubled in size since 1950, growing from about 1,000 square feet to 2,340 square feet in 2004.” This is despite shrinking families. One of the problems I have seen as a sales representative in home design is that people are too concerned with a big house. They squawk at every price, even when I’m saving them money, suggesting a very tight budget. Not only is this financially unwise, but a bigger than needed house is a blatant waste of time, money, and resources, especially if it ends up in foreclosure.

Wilson also states in his book that “Downsizing the house allows you to incorporate higher-quality products, additional amenities, and a higher level of craftsmanship.” A smaller home requires more spending in better, more efficient design. However, this pays for itself by simply building smaller. You’ll spend less to build it, and you’ll spend less to maintain it. This will open up money for even more money saving expenditures like solar or wind power, energy-star rated appliances, and higher R-value insulation.

Wasteful spending may seem luxurious and even smart (if you’re playing the real estate market correctly), but it is nonetheless wasteful. Smaller, more efficient design is the answer to our budgets and the natural environment. Let’s not kill our economy and our resources with one punch of mass foreclosures.