Charleston is very different than Seattle, in many good ways, and since I’ve lived here most of my life, I’ll tell you about the good and bad.

First, the weather will be very different.  Our weather is warm and humid, and in the summer, downright hot.  Think 98 degrees with 90% humidity- no need for flannel shirts!  Your new wardrobe should include plenty of short sleeved shirts and flip-flops (Rainbows).  We hardly ever get snow.  If we do get a dusting of an inch of so, expect schools to cancel classes and roads to be closed- this usually makes for good laughs from folks that have moved here from up North or out West.  We just don’t know how to drive in the snow (actually I do because I lived in Boston, but just speaking in generalities). 

We do have cool days, even stretches of days below freezing in the winter,  but during this time of year, it still reaches the 80s.  My family and I were swimming in our pool last week!  The ocean is warm and perfect for swimming and watersports as well.  Unlike the chilly Pacific, the Atlantic heats up quickly in the spring, topping out in the 80s during the summer, almost like bathwater.  Boating, kayaking, paddleboarding, surfing, fishing, kitesurfing……many ways to enjoy the ocean and our plentiful waterways. Our beaches are clean and beautiful, with wide sandy expanses to enjoy sunbathing or a stroll.

Washington is a blue state, we’re a red state. However, Charleston County itself is blue.  We’re probably the most progressive county in the state, but overall, Charleston is more conservative than Seattle.

We do have good schools in the Charleston area.  We have problems like every school district, but schools such as the Academic Magnet, School of the Arts and Wando High School have won national awards.  If you want to learn more about schools in the area, check out www.ccsdschools.com.

Coffee on every corner?  Not quite, but your own Starbucks has quite a presence here in Charleston, as well as coffee shops  such as Rutledge Coffee and Cream, Port City Java,….

We haven’t produced our own Nirvana, Pearl Jam, or Jimi Hendrix, but we do have Hootie and the Blowfish, Edwin McCain and a pretty nice little music scene.  We have the Music Farm downtown, a Convention and Performing Arts Center and  the North Charleston Coliseum for larger acts, and one of my favorites, the Windjammer on Isle of Palms (a bar on front beach).  Each week in our local paper, the Post and Courier, they have the Preview section on Thursday, where you can check out local venues and find out what’s happening on the upcoming weekend. Visit the Post and Courier  at www.charleston.net.

We also have the Charleston Ballet Theatre, Charleston Symphony, Footlight Players, Charleston Stage Co, Village Playhouse……. many opportunities to enjoy community theater, music, and dance.  Charleston is also host to the Spoleto Festival each year during the last week of May and the first week of June; a celebration of the arts that is one of the largest in the world.  Visit www.spoletousa.org for details.

We have outstanding restaurants!  Just to name a few of my faves- Charleston Grill, Peninsula Grill, Oak Steakhouse, FIG, Il Cortile del Re, Cypress…..I could go on and on.   You’ll want to try some Southern favorites such as barbeque, shrimp and grits, and sweet tea.  Many of our restaurants create their menus using local seafood or old fashioned southern cooking (think collard greens and sweet potato casserole).

Like to golf? Our wonderful climate makes the game possible year round! We have the Ocean Course on Kiawah Island, the Links and Harbor Courses at Wild Dunes, neighborhood courses, public courses….. I don’t golf myself, so I can’t give you any more of the scoop here.

Charleston  is home to the College of Charleston, the Citadel (a military college) and the Medical University of SC, so we have some of the vibrancy of a “college town”.  MUSC also has a teaching hospital, attracting researchers from around the world.  We have an outstanding medical community.

Professional sports?  We don’t have the equivalent of the Mariners or Seahawks…. Here you’ll find the Charleston Riverdogs (Class A affiliate of the NY Yankees), SC Stingrays (hockey team- 3 time Kelly Cup Champs) and avid fans of college sports- the biggest state rivalry game will be on 11/28/09 between USC and Clemson.  Go with a local to a Clemson or Carolina game to experience tailgating at its best.

Here are some of the negatives, which you may or may not have in Seattle- bad drivers, humidity, mosquitoes, no-seeums (tiny annoying gnats), “Palmetto bugs” (roaches),  hurricanes, earthquakes, snakes.   As far as earthquakes, we haven’t had a big one in over a hundred years.  Hurricanes- our last big one was Hugo in 1989.  You just have to stay informed during hurricane season (June 1st to Nov 30th), make preparations if a storm is heading our way, and evacuate if warnings are issued. 

You may see the motto “Smiling faces, beautiful places”- this is very true for SC.  We have friendly people, and Charleston consistently wins most mannerly city awards from travel magazines.  Charleston is an old city, rich with history dating back to the 1660s.  I would encourage you to visit downtown Charleston to view the architecture, walk the remaining cobblestone streets, or maybe take a carriage ride.  

This is a great place to live and raise a family! We have a pretty laid back lifestyle, a wonderful climate, and plentiful opportunities for fun.  Finally, you’ll have to get used to hearing “ya’ll” .   

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007, when it was 100.7.

Affordability at Record High
Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.

“Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.

First-Time Buyers
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

By Region

• Northeast: The Pending Home Sales Index declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008.
• Midwest: The index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago.
• South: Pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008.
• West: The index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.

“Keep the Momentum Going”
NAR President Charles McMillan said Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said.

“To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.

NAR’s Housing Affordability Index stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates, and family income.

Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later?’ to ‘I don’t want to miss out on a recovery.’”

Source: NAR

HANALEI, Hawaii — If life is a beach, Hanalei Bay must be heaven.

This remote, two-mile crescent-shaped beach on Kauai where the emerald mountains meet the sparkling sea was selected No. 1 on “Dr. Beach” Stephen P. Leatherman’s 2009 list of top 10 beaches, which was released Friday.

Hanalei beat out other shores stretching from San Diego to Cape Cod.

“The sheer beauty of Hanalei Bay is breathtaking,” said Leatherman, director of Florida International University’s Laboratory for Coastal Research. “It’s really an idyllic setting.”

Hanalei features postcard views from every angle and is untouched by the feverish development that has transformed the coastlines of other islands. It’s cherished by both locals and tourists as the perfect spot to swim, surf, snorkel or simply escape and unwind.

“It’s just gorgeous,” said Annie Meredith, who regularly surfs in the bay. “You’ve got green mountains, white sand, blue ocean — that’s kind of hard to beat.”

The runner-up on Leatherman’s list was Siesta Beach in Sarasota, Fla., followed by Coopers Beach in Southampton, N.Y., on Long Island; Coronado Beach in San Diego; Hamoa Beach in Maui, Hawaii; Main Beach in East Hampton, N.Y., on Long Island; Cape Hatteras in Outer Banks, N.C.; Cape Florida State Park in Key Biscayne, Fla.; Coast Guard Beach on Cape Cod, Mass.; and Beachwalker Park on Kiawah Island, S.C.

Leatherman based his selections on 50 criteria, including water quality and temperature, cleanliness, weather, sand, safety and facilities. And Hanalei is his personal favorite “getaway beach” in Hawaii.

“If I want to get away from it all and forget about the rest of the world, Hanalei is about the best place to go, as far as I know,” he said.

Hanalei is located on Kauai’s North Shore around the corner from the Napali Coast, the most stunning corner of the state. One side offers lush valleys, dramatic waterfalls and sculpted mountains with peaks that rise 4,000 feet. On the other is the Pacific, where dolphins and sea turtles can be seen.

The big attraction here is that it’s not a big attraction. Unlike in the high-rise jungle of Waikiki, where thousands of glowing-pale tourists sprawl across the sand like eggs in a carton, there’s plenty of breathing room in secluded Hanalei.

For the full article, visit http://www.comcast.net/articles/news-national/20090522/Best.Beaches/

*** Beachwalker Park at Kiawah is on one of the barrier islands off of the coast of Charleston, SC.  It is a gorgeous area overlooking the river and waterways as they flow out and meet the ocean. This is a public park with parking, picnic tables, showers. Kiawah Island is a private gated community.

By Liz Pulliam Weston

 Popularity is a mixed bag when you’re looking for vacation property.

A hot destination means more crowds, more traffic, longer lines. But if you’re keeping an eye on investment potential — and more than one out of three second-home buyers say they are — then you want to buy where others want to be.

What you really want, though, is to buy today in an area that’s going to be hot tomorrow, so what are the ingredients that will turn a sleepy village into the next Aspen or Hilton Head?

A beautiful setting is a must, but here are some other important factors:

• Proximity to growing urban centers. Vacation towns typically need to be within a two- to three-hour drive of a major city, or at least reasonably close to a big airport.
• Plenty of recreational opportunities. There has to be lots of stuff to do beyond shopping, which is why most thriving resort towns are near ski lifts, beaches or mountains. Some cultural cachet — a theater or film festival, galleries or museums — is also nice.
• Decent weather. You have to be able to get outside to enjoy all that recreation.
• Significant commercial investment. The old-timers may grouse about the new hotels or malls, but these are good indicators that others think the community is on the way up.
• The “it” factor. The community gets discovered by movers, shakers and celebrities — or at least enough other folks like you — for prices to get bid up.

Consider the following two lists of hot (and potentially hot) vacation home markets compiled by EscapeHomes.com, an online listing service for second homes, timeshares and other vacation property. Youll see some interesting similarities, as well as a few towns that break the rules.

The top 10 towns for second-home investments

EscapeHomes.com identified popular second-home destinations that appreciated at least 10% a year in value between 1998 and 2002 and which may have further to go.

 The results are based on their own listings for real estate in these communities. Listings aren’t sales, though, and EscapeHomes.com doesn’t reflect the whole market. In fact, real estate professionals in some of these towns (Asheville, N.C., for example) say sales were never that hot, while those in others (Park City, Utah, and Sunriver, Ore.) say appreciation has slowed in recent years.

Where possible, Ive included price appreciation figures compiled by the federal Office of Federal Housing Enterprise Oversight, which oversees housing finance companies Fannie Mae and Freddie Mac and which compiles housing sales data for larger metropolitan areas.

With all those caveats aside, here are the Top 10 second-home investment markets:

• Asheville, N.C. This mountain town boasts the Biltmore Estate and a thriving arts and crafts community. Home prices are up 35% in the past five years, compared with the national median growth of 27.8%.
• Park City, Utah. The Olympics-related frenzy has cooled, but Park City is still a preferred destination for skiers and other winter sports fanatics. Prices this year are up between 5% and 7%, according to real estate broker Mike Sloan, statistician for the areas Board of Realtors.
• Ashland, Ore. Lovely weather, lovelier scenery and cultural cachet combine in Ashland. Located about halfway between Portland and San Francisco, the town is also home to Southern Oregon University and the highly regarded Oregon Shakespeare Festival. Ashland’s home values have exploded in recent years. Home prices in the region that includes Ashland and nearby Medford have risen at least 40% since 1998, according to federal figures, while a local appraiser puts Ashland’s average home price growth closer to 70% in that period.
• Port Townsend, Wash. This picture-perfect Victorian seaport lay nearly untouched for most of its long history until being discovered by Seattle yuppies in the 1990s. It’s still quaint, but relatively mild weather and proximity to Olympic Peninsula attractions have increased its appeal for retirees and urban refugees.
• Beaufort, S.C. You know Beaufort, even if you’ve never been there. You’ve seen it in movies like The Big Chill and Forrest Gump, and you’ve read about it in the pages of The Prince of Tides and The Great Santini by one-time Beaufort resident Pat Conroy. Fishing, shrimping and a National Historic Landmark District are features of The Queen of the Carolina Sea Islands.
• South Lake Tahoe, Calif. Though it shared Americas largest alpine lake with the more glamorous Lake Tahoe, Nev., this community was long the dowdy little sister. No more. Two new Marriott’s have replaced a strip of decaying old motels along the main drag, and there’s talk of a convention center. Median home prices are up 21% from last year, said Madeleine Gutierrez, vice president of the South Lake Tahoe Association of Realtors.
• Daytona Beach, Fla. Nineteenth-century industrial barons popularized Daytona, which is probably best known for the international raceway built in 1959 and the Daytona 500 auto race. Eight million visitors pour through annually. Home prices are up 44% in the past five years and nearly 9% in the last year alone.
• Sunriver, Ore. This central Oregon resort area is near Bend and the Mt. Bachelor ski resort, about four hours from Portland and two hours east of Eugene. Whitewater rafting, hiking and skiing are favorite pastimes. Prices on some properties are about double what they were eight years ago, realtors say, but appreciation has slowed down in recent years along with the economy.
• Myrtle Beach, S.C. The beaches along The Grand Strand — and the areas 120 golf courses — draw 14 million visitors annually. Despite the crush, Myrtle Beach consistently winds up in various listings of the nation’s best beaches and best retirement towns, with home prices rising at an 8% annual clip.
• Charlevoix, Mich. This little town lies between the shores of Lake Michigan and Lake Charlevoix in northern Michigan. The population of the town and surrounding area is 8,500 full-time residents — which climbs to 30,000 in the summer. Golf courses and water fun are the main attractions.

10 emerging second-home markets

Here’s another intriguing list EscapeHomes.com has concocted: vacation-home areas that are just beginning to get popular with its users. There’s no guarantee any of these will become the next Myrtle Beach. In fact, given the more remote and generally northern location of many of these sites, you can pretty much count that out. But there could be some second-home price appreciation ahead.

• Burnside, Ky. Community boasts a Catfish Festival and bills itself as The Only Town On Lake Cumberland! Its near Lexington, Frankfort, Louisville, Nashville and Knoxville and not far from the Big South Fork National Recreation Area.
• Caribou, Maine. Snowmobilers and cross country skiers venture down from Quebec and New Brunswick to enjoy the scenery in this northeast Maine town.
• Ely, Minn. The Gateway to the Boundary Waters Canoe Area Wilderness is a second home mecca for residents of Duluth and Minneapolis-St. Paul.
• Island Park, Idaho. This area near Yellowstone and the Grand Teton national park’s, is becoming an alternative to Bozeman, Mont. and Jackson, Wyo.
• Ketchikan, Alaska. This is a paradise for hunters, hikers and anglers, but you have to want to get there. Its more than 37 hours by road and ferry from Seattle, the nearest big city. Closer is Juneau, the state’s capital, but you still can’t get from here to there by road.
• Lake Martin, Ala. Bass fishing is big in this town nestled in the southernmost foothills of the Appalachian mountains. Nearby: Birmingham, Montgomery and Atlanta.
• St. George, Utah. Speaking of gateways, this little town is near much of Southern Utah’s most spectacular country, including Zion Canyon, Bryce Canyon, Cedar Breaks National Monument and the North Rim of the Grand Canyon. Closest cities: Las Vegas and Salt Lake City.
• Sisters, Ore. Another Central Oregon contender, Sisters is northwest of Bend. It’s a former lumber town turned fishing and tourist mecca on the edge the Deschutes National Forest. Closest cities are Portland and Eugene.
• Waterville Valley, N.H. Tucked inside the White Mountain National Forest, Waterville Valley offers all the outdoor experiences you could want, and then some. Concord and Manchester, N.H. are nearby. Boston is about 2 hours south on Interstate 93.
• White Mountains, Ariz. A cooler alternative to Phoenix, about four hours away, the White Mountains region offers snow sports in winter, golf and hiking in the summer and picturesque Indian villages all year round.

Now, for my input:  I’ve been to alot of these towns- Asheville, Lake Tahoe, Daytona, Park City, and yes, they are very nice and have much to offer.  You’ll even see that Charleston’s neighbors to the north in Myrtle Beach made the list, as well as our neighbors to the south in Beaufort.  But when you look at the criteria for choosing the towns……

*A beautiful setting: well, we have this in Charleston- historic antebellum homes, plantations, beaches, palmetto trees, marshes, waterways,……

*Proximity to an urban center or airport- downtown Charleston is only about a fifteen to twenty minute drive from the airport, where you can find non-stop flights to NYC, Washington DC, Chicago, Atlanta. Or if you’re flying internationally, a quick flight to Atlanta can then get you anywhere in the world.

*Recreational opportunities/cultural cachet- in Charleston, we’re surrounded by water, so there’s fishing, boating, kayaking, surfing, paddleboarding…. Also some fabulous golf courses such as the Ocean Course at Kiawah, the Links and Harbor Courses in Wild Dunes……tennis, biking, or simply running or walking on our beautiful Ravenel Bridge (site of the annual Cooper River Bridge Run).  As far as culture, one of the largest arts festivals in the country, the Spoleto Festival, begins tomorrow.  Charleston has a multitude of art galleries, the Charleston Ballet Theater, Charleston Symphony, local theater companies such as the Footlight Players and Charleston Stage.

*Decent weather- We have this as well (even though it’s been rainy and windy all week!)- For example, my family and I normally swin in our backyard pool from March until October, sometimes even taking a Thanksgiving dip!  Our weather is warm and subtropical, offering ample time to get outdoors and enjoy.

*Commercial Investment- The following comes from the Charleston Chamber of Commerce:Comprised of three counties – Berkeley, Charleston and Dorchester – the Charleston region is a highly diverse market, strategically located on the Atlantic coast half-way between New York and Miami. The region, which covers more than 3,100 square miles (8,192 kilometers), combines a thriving economy, rich history and breathtaking environment to offer an outstanding business climate and a quality of life that is second to none.

Home buyers qualifying for Federal Housing Administration-insured mortgages may soon use the new first-time home buyer $8,000 tax credit as a down payment, US Department of Housing and Urban Development secretary Shaun Donovan said today.

The process of applying the tax credit toward down payment, called ‘monetization’ in the industry, allows for FHA-qualified borrowers to use the tax credit to obtain a government-insured mortgage.

Donovan’s announcement came at a National Association of Realtors legislative summit this morning, although HUD’s details on the initiative aren’t scheduled for official release until next week. The initiative will allow FHA-approved lenders to monetize the tax credit through short-term bridge loans, letting borrowers access the funds at the closing table.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said, according to NAR.

The tax credit arrived as part of the American Recovery and Reinvestment Act of 2009 for qualifying taxpayers that buy homes in 2009. The law states that qualifying home buyers may claim up to $8,000 — or $4,000 for married individuals filing separately — on either their 2008 or 2009 tax returns. Unlike the previous law — which required recipients of the tax credit to repay the funds over a number of years without interest — the new home buyer credit effective with the passage of the act does not have to be repaid.

By DIANA GOLOBAY
May 12, 2009 3:08 PM CST

This article appeared on Housingwire.com

Greenspan: Dangers of Further Price Drops
Even with hopeful signs in the economy, afternoon panelists at the NATIONAL ASSOCIATION OF REALTORS®’ Real Estate Summit, “Advancing the U.S. Economy,” here today agreed that:

• Stabilizing housing prices is essential to a recovery.
• The federal government needs to inject great consumer protection into home lending.
• Financial industry reforms should address and protect against systemic risk from institutions deemed “too large to fail.”

Home prices are one of the biggest question marks in the economic recovery. How low can they go? Nationally, on average, prices have declined 30 percent. That’s been great for affordability, but it has been a blow to home owners who find themselves in a position of needing to sell while significantly underwater on their mortgages.

The Danger of Further Price Declines

To exacerbate the problem, increased inventory of unsold single-family homes continues to depress prices, said former Federal Reserve Chairman Alan Greenspan, whose keynote address led off an afternoon of speakers discussing the future of real estate finance.

If prices fall beyond another 5 percent or so, problems in the subprime and Alt-A categories will spill over into the conforming loan category, where defaults are still relatively low, Greenspan warned.

“After September 15—the date of Lehman was allowed to fail—equities fell off a cliff,” he said, losing $35 trillion in value. But in recent weeks, Greenspan said he has seen reasons for optimism.

Since March 9, he said, investors have added $10 trillion of value back into the global system. Real estate markets, he said, are at the beginning of a major liquidization of excess inventories.

“As a result, I expect, I hope, we’ll see stabilization,” Greenspan said. “While there are still great concerns, we’re beginning to see the seeds of bottoming, not in prices yet, but in sales.”

Asked about the future of Fannie Mae and Freddie Mac, Greenspan sounded the theme heard often here today. Organizations that grow “too large to fail” are a danger to the country’s economic health. During the boom, Fannie and Freddie became overlarge and overleveraged. To protect the “very important role of mortgage securitization,” they should be split into smaller organizations, he said. “I don’t think the existing structure is sustainable.”

Making Loans Understandable

Following Greenspan’s speech, personal finance writer Jane Bryant Quinn led a panel of residential and commercial real estate practitioners, academics, policy experts, and journalists in a discussion of how to restore the flow of capital to real estate and protect the future of real estate finance.

Panelists offered ideas for improving the short sale process, extending the tax credit to all buyers, and strengthening HUDs Hope for Homeowners program, which was intended to help owners restructure their loans but has served virtually no one. Dina El Boghdady, a real estate writer for The Washington Post, said she was encouraged by recent congressional action to improve the program. Proposals have been passed by both the House and Senates. A compromise bill could reach President Obama’s desk within weeks.

The panelists called for meaningful reforms to the real estate finance industry that will protect consumers from mortgage instruments they can’t understand.

Kathleen Hays, an anchor on Bloomberg Television, commended NAR for its leadership on the reform front and urged REALTORS® to contact their members of Congress in support of the Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728). NAR President Charles McMillan testified before the House Financial Services Committee April 23 in support of the bill, which passed the House in early May.

—Stacey Moncrieff, REALTOR® Magazine

Article appeared on msnbc.com, written by senior editor Mike Stuckey:

BOTHELL, Wash. – After two years of married life in a 680-square-foot, one-bedroom Seattle condo, Lori and Chris Kirsten were ready to spread out in a real house with room for a home theater and a yard where the Labrador retriever they had always wanted could roam.

The Kirstens prepared to list their condo for sale and go house-hunting, banking on equity in the unit, which Lori had brought in 2003 for $130,000, to help with the transition to a larger place. Seattle’s hot real estate market had pushed the condo’s value to $215,000 or more at its peak in 2007.

But their home search lost some steam when their agent told them Western Washington real estate prices, although not in the freefall experienced elsewhere, had still declined to the point that their unit might now fetch $25,000 or $30,000 less than two years ago. When they saw condos comparable to theirs selling for as little as $170,000, “I thought, ‘I just can’t do it,’” Lori recalled.

Their mood brightened when they began shopping in the spacious neighborhoods of this suburb northeast of Seattle and found a 3,000-square-foot, four-bedroom split-level on a half-acre of towering fir trees that they wound up buying for $425,000. That’s $86,000 less than the $511,000 peak value placed on the home by real estate Web site Zillow.com, $64,000 below the original asking price of $489,000 and even well below the final asking price of $438,000.

A buyer’s market
The Kirstens — Lori, 36, is a physical therapist and Chris, 33, is a Microsoft manager — are among the relatively small number of home buyers across the nation who are taking advantage of the record drop in real estate prices and historically low interest rates sparked by the mortgage meltdown and foreclosure crisis to move up into bigger or fancier digs.

It’s a trend that many in the languid real estate industry would like to encourage.

“Obviously, if you’re selling for less than you could have gotten two years ago, you’re disappointed, but you really need to look at your bottom line,” said Walt Molony of the National Association of Realtors. “If you’re trying to trade up, whatever you’re going to trade up to is going to sell at a discount, too. You need to look at your net.”

Real estate agents from the foreclosure epicenters of Florida and California to more stable markets like the Seattle area are using that advice to lure move-up buyers.

“Do the math,” said agent Mark Zawideh, who has been selling homes in the suburbs west of Detroit, where prices have declined 18 percent in the last year alone. “If you’re in a $200,000 house (the median price in the area) and you lost 18 percent, that means you lost $36,000,” Zawideh said. “But if you’re moving up and buying a $500,000 house, that person just took a $90,000 loss, so you can see you’re making 54,000.”

“If you didn’t sell at the peak, be happy,” Zawideh said. “Don’t look back and be sorry. The fact that you’ve waited ends up being a great decision. A lot of people get excited when they sit down and do the math.”

Helping move the market
While buyers seeking larger homes have traditionally not been a huge part of the market — about 15 percent in the Realtor association’s 2008 survey — Molony said they likely contributed to an uptick of 5 percent in year-over-year shopper traffic in February, a figure that he expects to be bested when March numbers come out today. In addition to the increase in shoppers, existing home sales also rose 5 percent to an annual rate of 4.72 million in February, the association reported.

A federal tax credit and other incentives for first-time buyers probably contributed more to the surge in both numbers, with half of all buyers now newcomers to the market, according to National Association of Realtors figures.

Molony stressed that price declines and low interest rates have combined to offer buyers “record affordability,” as calculated by its national index. The national number is currently 167, which means that median income households can afford homes that cost 167 percent of the median price.

While rising prices can push affordability down, realtors point out that rising interest rates can work against would-be buyers much more quickly. A one-point hike in interest rates boosts monthly mortgage payments the same as a 10 percent increase in prices.

“The affordability conditions are optimum right now,” Molony said. “We will be seeing a little pressure on rates later this year. It’s really hard to time the bottom of the market, which will be apparent in hindsight. If we aren’t at the bottom of interest rates now, we’re within an eighth of a point.”

Zawideh, the Michigan agent, said he asks clients who are nervous about moving up this question: “Where do you want to wait for the market to turn around?” He points out that just as market declines are leveraged by the total value of the house, so too is appreciation. “Where the market turns around, wherever you’re sitting, it’s going to turn around for you there, too.”

Despite that logic, some agents still find it hard to persuade homeowners coveting bigger places to sell their current houses for tens or even hundreds of thousands less than they could have gotten a few years ago, especially in higher value areas.

“Sellers seem to still be frozen in time,” with many unable to set realistic prices, said Sandy Wallace, an agent in Santa Cruz, Calif., where values are down about 30 percent from their highs in 2006, knocking the median price of a home from the $800,000’s to the $600,000’s.

Pricing their condo to sell quickly — they were in escrow within three weeks — was exactly what positioned the Kirstens to make a winning offer on the Washington state home of their dreams.

Struggling for the right price
“We struggled for quite a while,” Lori Kirsten said, touring many competing listings before settling on an asking price of $199,900, which they received, less a few thousand dollars in concessions to the buyer.

Their agent, Jess Beyers of nearby Bellevue, said he is starting to see more move-up clients like the Kirstens, ready to lower their expectations on sale price to gain on the purchase side of the equation.

“I don’t know that they really do the math to the extent that they say, ‘I lost 20 (thousand dollars) on the condo but I saved 40 (thousand) on the house,’ as much as they say, ‘Wow, we couldn’t buy that place two years ago, but we can afford it now,’” Beyers said. “I don’t want to be the one to talk people into buying real estate or moving up right now if they don’t already have a good reason, but if you’re on the fence then this is one of the benefits you might gain.”

Surveying the newly remodeled kitchen and gleaming wood floors of his new home, more than four times the size of the condo he left, Chris Kirsten agreed. “We’re happy,” he said. “No regrets.”

Outlook Favorable for Second-Home Market
Despite weakening second home purchases in 2008, the long-term demand looks favorable for the second-home market because there are large numbers of people in the prime years for buying a second home.

Currently, 39.2 million people in the United States are ages 50 to 59—a group that dominated sales in the first part of this decade. An additional 44.8 million people are between 40 and 49, and another 40.7 million are 30 to 39.

“While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain,” says Lawrence Yun, NAR chief economist. “Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade.”

The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007. The typical investment property cost $108,000 last year, which is 28 percent below the 2007 median of $150,000.

“As in the market for primary residences, it appears that many sales of deeply discounted distressed homes are pulling down the median price in the second-home market as well,” Yun says.

Yun says lifestyle considerations are the single most important factor in the vacation home market.

“People are buying weekend homes or recreational property to use themselves or for a family retreat—investment considerations are secondary for most vacation-home buyers with relatively modest interest in renting,” he says.

2008 Second-Home Market Declines

The combination of vacation- and investment-home sales slipped to 30 percent of all existing- and new-home transactions in 2008, according to the NATIONAL ASSOCIATION OF REALTORS ^®‘ latest report.

However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.

The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007. The total share of second homes declined from 33 percent of all transactions in 2007. In 2005, the peak year for home speculation, 40 percent of sales were second homes.

NAR’s 2008 Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.8 percent to 512,000 last year from 740,000 in 2007. Meanwhile, investment-home sales fell 17.2 percent to 1.12 million in 2008 from 1.35 million in 2007. Primary residence sales declined 13.2 percent to 3.77 million in 2008 from 4.34 million in 2007.

Yun says the findings are understandable given the economic backdrop.

“We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” he says. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”

Vacation Home Market Snapshot

The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.

When asked about their reasons for purchasing a vacation home, 89 percent of buyers wanted to use the home for vacation or as a family retreat; 27 percent to diversify investments; 27 percent to rent to others; 26 percent to use as a primary residence in the future; and 17 percent for use by a family member, friend or relative.

Some other findings on this market:

• In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city.
• Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or rowhouses, and 7 percent other.
• Sixty-nine percent of vacation home buyers and 84 percent of investment home buyers purchased existing homes; the rest purchased new homes.
• Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
• When asked about the most important reasons for purchasing an investment home, 58 percent said to provide rental income; 38 percent to diversify investments; 19 percent for use by a family member, friend or relative; and 15 percent to use for vacations or as a family retreat.
• Twenty-eight percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town, and 6 percent in a resort area.
• Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or rowhouses, and 6 percent other.
• Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years.
• Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers.

Looking for a second home?  I’m a Resort and Second Property Specialist (RSPS Certified)- I’ll help you find the perfect vacation home in Charleston or on the coast. Call me at (843)324-3476 or email lgordon@carolinaone.com.

Why Architecture MattersAnd how you can tell good from bad.

BY MARIWYN EVANS

If you’ve ever had buyers turn up their noses at a house before they even got out of the car, you understand that architecture matters. But the question remains: What is good architecture and how do you get your buyer clients to focus on the bones of the house, not just the exterior?

“Good architecture, whatever the style, is what makes a house feel like a home,” says Keith Moskow of Moskow Architects in Boston. “It’s not just aesthetics. It’s a certain feeling that this place feels like home. You could live in a jail cell, but it wouldn’t feel like home.”

Is it Sited Right?

How well a home integrates with its site is a key to make a home feel welcoming, says Moskow. A house should connect with its outside environment and be placed on the site so that it seems to fit in.
For example, an infill house on a street of dozens of homes shouldn’t stick out or be conspicuous. At the same time, it doesn’t need to mimic a historic home as much as offer a contemporary version of the same design idea. Likewise, if the site has a positive or negative aspect, such as a great view or a noisy highway, the home should be oriented accordingly.

The home’s position on the site also is important because it affects how natural light and air flow through the home at different times of day.

In Portland, Ore., where cloudy days are the norm, “light is a huge consideration,” says Jeffrey Lamb, associate principal and senior designer for Sienna Architecture Co.

Too much light also can be a problem, so homes in the sunny South should have awnings, roof overhangs, or trees to reduce the heat of afternoon sun in living areas facing south or west.

The home owners’ lifestyle and the use of interior spaces can affect where and how much light is desirable. Ideally, rooms where residents begin their day should face east, says Lamb. Office spaces should face north, where there’s no direct sunlight to create glare. Rooms for living and entertaining should face south and west.

TIP: The positioning of windows in a room may offer a clue to well-designed homes. Windows on the ends of a wall allow the light to flow across the entire space, while a window in the center keeps corners dark, notes Louis Smith, principal of Microtecture in Charlotte, N.C., and 2007 chair of the American Institute of Architects’ Small Projects Group.

Go With the Flow

Sight lines inside and outside, as well as between rooms, are a consideration in assessing a home’s livability and aesthetic appeal. Kevin Harris of Kevin Harris Architect LLC in Baton Rouge, La., recalls a client who loved a house he’d seen until Harris pointed out that when you entered the front door, your first view was all the way through the house to the master bathroom. “I told him we could have fixed the problem, but he just lost interest in the house after that,” says Harris.

Flow between rooms is another big factor in making a house feel more livable, says Moskow. Buyers should look for a house in which the rooms they plan to move through often are easily accessible from one another.

“They should walk through the house as if they lived there,” Moskow advises. “They should think about where they’re going to leave their coat, how they’re going to move from the public to the private space, and how they spend their time when they’re at home. No home style or layout is going to be right for every home owner’s needs.”

Do the buyers entertain? If so, do they want a formal dining room with an intimate space for eight or a large space that can easily accommodate 30?

Moskow advises that buyers “make a list of what’s most important to them and then evaluate the home’s design accordingly.”

TIP: Changes in ceiling height between rooms can create a sense of variety and add architectural appeal, says Smith. “I don’t mean those houses with the gratuitous cathedral ceiling that makes you feel like you’ve walked into a tube,” he says.

A ceiling a few inches lower can create a sense of intimacy; a little added height will make a room feel more open when you move from a lower to a higher space. If the house is fortunate enough to have 9-foot or 10-foot ceilings to begin with, variety in ceiling height is an easy feature for buyers to add, Smith notes.

Notes on Design

Just as lifestyle should impact the house that buyers choose, it should also dictate room arrangement and material choices.

Owners will be happier with room layout if they’re honest about their preferences, suggests Oma Blaise Ford, senior deputy editor at Better Homes and Gardens. If they spend a lot of their time watching TV, for example, they should put the TV set near the main living areas, not hide it away.

With regard to materials, durability should be a consideration, especially for owners who have kids or pets. They should avoid easily marred wood floors and stick to tile in high traffic areas. They also should consider countertops with rounded edges to cut down on injuries. “The materials of the home should be attuned to the way an owner lives,” says Moskow.

Finally, it’s important to remember that good architecture isn’t just for the wealthy or the trendy; instead it’s a fundamental part of what makes a house a home.

LINKS
Architecture Guide
Descriptions of more than two dozen home styles and architectural elements.

House Sense
Elements of Design
Architecture Matters
Architecture Expert
Maintenance Must-dos
Remodeling Adviser
Green: Easy Does It
Staging Secrets
Home & Design Main Page Finding Energy Leaks

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Interior Design Trends
Exterior Design Trends