MarketWatch published a market report two days ago about an increase in sales in the housing market. Have we hit the bottom so soon? What I found most interesting were the comments at the bottom. The experts in the peanut gallery tend to disagree.

Author Rex Nutting reported on word from the National Association of Realtors. “Sales of single-family homes rose 2.8% in February to 4.47 million, the second increase in a row and the fastest sales pace since August,” wrote Nutting. He quoted Joel Naroff, president of Naroff Economic Advisers who said “”We seem to be finding a bottom in home sales even as prices keep falling.” One user commented “It’s all about spin baby, thats all it is.”

While the increase in sales and the decrease in homes on the market is a good sign, it’s interesting that 175 comments in one accord sang disgust. Usually commentators tend to argue one with another, some with the proceeding article, some against. Not this time. Are we being overly pessimistic when we doubt reports from the National Association of Realtors? What possible benefit do they have in tweaking the truth? It will be telling when other organizations follow up with their own studies.

Commentators often toted the ridiculous appreciation rates of homes compared to inflation from the last couple of years. They noted that it was bound to crash. Many laughed at American’s tendency to buy much more than they can afford, trying to “keep up with the Jones’.” I think the best approach was from an “economist for Wachovia” who did so with “cautious optimism.”

HousePlans.Info: The latest trends, observations and opinions on all things related to house plans, home design and home building.

Pardee Homes just made a really tough decision. Their Sacramento development has halted. Building crews have been let go and “deals made with only four buyers canceled” reports Jim Wasserman of The Sacramento Bee. The company has invested $200 million in the region and says it’s not shutting down for good. David Ragland, chief of Pardee’s Sacrament division, told Wasserman that “We plan to re-emerge and reopen in a year or a year and a half in a market with less competition.” I want to be the first to congratulate them on the right decision.

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…

HousePlans.Info: The latest trends, observations and opinions on all things related to house plans, home design and home building.

I was disappointed to read an article titled “Developers helped build a bust.” According to Mara Der Hovanesian of BusinessWeek, many developers began selling mortgages as well. They ended up misrepresenting clients’ income to sell their homes at higher prices. This has ended up in virtual ghost towns as foreclosures soon became the only option for hundreds of “homeowners.” What a wasteful mistake.

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.

HousePlans.Info: The latest trends, observations and opinions on all things related to house plans, home design and home building.