September 2010


By Courtney Schlisserman and Bob Willis – // Sep 21, 2010 8:22 AM PT Propeller

 

Housing Starts in U.S. Increased More Than Forecast

Builders broke ground on 598,000 homes at an annual rate, up 10.5 percent and the most since April, following a 541,000 pace in July, the Commerce Department said in Washington. Photographer: Jim R. Bounds/Bloomberg

Sept. 21 (Bloomberg) — David Semmens, an economist at Standard Chartered Bank, talks about the outlook for the U.S. housing market and the need to maintain government support of the mortgage market. Semmens speaks with Deirdre Bolton and Jon Erlichman on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Sept. 21 (Bloomberg) — Housing starts in the U.S. increased more than forecast in August, a signal the industry is stabilizing. Builders broke ground on 598,000 homes at an annual rate, up 10.5 percent and the most since April, following a 541,000 pace in July, the Commerce Department said today in Washington. Bloomberg’s Betty Liu and Michael McKee report. (Source: Bloomberg)

Sept. 20 (Bloomberg) — Bernie Markstein, senior economist and vice president for economic forecasting and analysis at the National Association of Home Builders, talks with Bloomberg’s Melissa Long about the group’s survey showing confidence among U.S. homebuilders held at the lowest level in more than a year. The National Association of Home Builders/Wells Fargo confidence index was unchanged at 13, matching the August reading as the lowest since March 2009, data from the Washington-based group showed today. (Source: Bloomberg)

Housing starts in the U.S. increased more than forecast in August, outstripping a gain in building permits that signals residential construction will stay close to record lows.

Builders began work on 598,000 homes at an annual rate, up 10.5 percent and the most since April, the Commerce Department said today in Washington. Economists surveyed by Bloomberg News forecast a 550,000 pace. Permits, an indicator of future activity, were issued at a 569,000 rate.

Builders took out fewer applications to start single-family homes for a fifth consecutive month, signaling a jobless rate at or above 9.5 percent for the past 13 months is hurting companies such as Hovnanian Enterprises Inc. A distressed housing market is among reasons Federal Reserve policy makers meeting today will consider whether new measures are needed to boost growth.

“The housing market has found a bottom, and we’re bouncing along here,” said Thomas Simons, an economist at Jefferies Group Inc. in New York. “The market is challenged by supply, and until that is cleared out, it will be tough for the homebuilders. We also need additional job creation.”

Estimates for August starts in the Bloomberg survey of 74 economists ranged from 505,000 to 600,000 after a previously reported 546,000 a month earlier.

Builder Shares

Stocks fluctuated as declines in technology and consumer- staples companies offset a rally in homebuilders. The Standard & Poor’s 500 Index fell 0.2 percent to 1,140.60 at 11:20 a.m. in New York. The S&P Supercomposite Homebuilding Index, which includes D.R. Horton Inc. and Lennar Corp., rose 0.9 percent. The yield on the 10-year Treasury note fell to 2.67 percent from 2.70 percent late yesterday.

The gain in starts was led by a 32 percent jump in construction of multifamily units, which is often volatile. Work began on 4.3 percent more single-family houses, which accounted for 73 percent of the industry.

Similarly, the 1.8 percent increase in building permits last month reflected a gain among multifamily units, which include townhouses and apartment building. Applications for single-family projects dropped to the lowest level since April 2009.

“Even though single-family starts moved in the right direction, there is still weakness evident in the single-family data,” Daniel Silver, an economist at JPMorgan Chase & Co. in New York, said in a note to clients. “The level of starts relative to permits indicates that the growth in housing starts may not be sustained.”

Regional Breakdown

Three of four regions of the country had an increase in starts last month, led by a 34 percent surge in the West and a 22 percent gain in the Midwest.

The Fed’s policy-making Federal Open Market Committee is scheduled to announce its decision on interest rates today at about 2:15 p.m. The benchmark interest rate has been in a range of zero to 0.25 percent since December 2008.

The central bank said in its Beige Book survey of regional Fed banks earlier this month that there were “widespread signs of a deceleration” in the economy from mid-July through the end of August. Most areas of the U.S. reported “very low or declining home sales.”

Sales of new houses dropped in July to the lowest level in records dating back to 1963, figures from the Commerce Department showed last month. The government is scheduled to release August sales data on Sept. 24.

Tax Credit

Demand plunged after the deadline for signing contracts and becoming eligible for a government homebuyer credit worth as much as $8,000 lapsed on April 30. The tax incentive provided temporary relief for the industry that precipitated the recession.

Rising foreclosures depress prices and mean homes stay on the market longer, hurting builders. Home seizures reached a record in August for the third time in five months, RealtyTrac Inc. said Sept. 16.

A lack of jobs is preventing some buyers from making mortgage payments. The 13 months of unemployment at 9.5 percent or higher matches the period from mid 1982 to mid 1983 as the longest span of elevated joblessness since monthly records began in 1948.

Payrolls dropped in 36 states in August, indicating the labor market will take time to rebound, figures from the Labor Department also showed. Employers in Michigan cut 50,300 jobs last month, the biggest drop since January 2009. Texas and California rounded out the three states with the biggest job losses. Joblessness climbed in 27 states, with Nevada reaching a record 14.4 percent rate, the highest in the nation.

Obama Plans

The Obama administration has said it plans to announce proposals in the next few weeks for an emergency loan program for the unemployed to avert default, and a government mortgage refinancing effort to lower monthly mortgage payments to avoid foreclosures.

The end of the homebuyer credit, joblessness and sagging consumer confidence prompted a decline in orders at Hovnanian, the largest homebuilder in New Jersey said on Sept 1. The company said its net orders dropped 37 percent in the quarter ended July 31 from a year earlier.

“Job creation is the key to a housing recovery, which makes it difficult to predict how improvements in the economy and housing market play out,” Chief Executive Officer Ara Hovnanian said in a statement.

To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net; Bob Willis in Washington at bwillis@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

 
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Europe’s economies: Turbocharged Germany

 

THE machine that sputtered badly during the slump in world trade is now firing on all cylinders. Figures released on August 13th showed that the German economy grew by 2.2% (an annualised rate of close to 9%) in the three months to the end of June, well above even the most optimistic forecasts. The German figures, the best since reunification almost two decades ago, meant that the euro-area economy had a good quarter, too. GDP in the 16-country block rose at an annualised rate of 4%—much faster than in America and only a bit shy of surprisingly strong growth figures in Britain.

The success of the euro-area’s largest economy owed a lot to a surge in exports (much of it to emerging markets) and to investment by firms at home looking to upgrade and expand their capital stock to meet that demand. Germany’s talent for bespoke engineering and sleek cars fits well with the needs of fast-industrialising countries and their new middle classes. China is a prized customer for the German firms that supply kit for power plants and other infrastructure projects. Small producers of niche capital goods have also seen a surge in orders. German cars have been selling well to affluent consumers in emerging markets. Sales of luxury Mercedes cars to China tripled in the year to July. Sales to India more than doubled. Other carmakers, such as VW and BMW, have prospered too.

This surge in new business has been good for jobs. Unemployment in Germany has been steadily falling, in contrast to the trend in the rest of the euro zone—and America. Firms used a short-time working scheme and flexible hours to keep hold of workers when demand was weak. Many of the workers whose hours were cut have been drawn back into full-time work far more quickly than firms had dared hope. Unemployment in Germany is now lower than it was when the crisis began.

It seems almost strange that the euro-area economy was so strong at a time when a sovereign-debt crisis and regional imbalances seemed to threaten the single currency’s very existence. The GDP figures show that the latter problem has not gone away. Countries with strong ties to Germany’s export machine, such as Austria and the Netherlands, posted strong growth. The figures from France were solid, too (if based more on consumer spending than exports). But in Spain and Portugal GDP rose by a feeble 0.2% in the second quarter. Greece’s economy shrank by 1.5% (see chart).

That will not worry the German firms whose focus is increasingly Asia and Latin America. Nor will American complaints that Germany is living off the spending of others and adding little to global demand have much impact. There are some signs that Germany’s recovery is leading to more spending at home. The German statistical office said that consumer spending made a positive contribution to GDP. Some firms are already reporting skill shortages, which ought to be good for jobs, wages and (eventually) consumption. Even so, a more balanced recovery in Germany may yet be thwarted by fragile banks and by the inherent thrift of consumers. It is telling that Germany is one of the few places where sales of Mercedes cars have fallen this year.

The renewed hope in Europe contrasts with anxiety in America, where the economy is faltering and jobs growth is scarce. But just as these concerns are a warning to Europeans that the global recovery is not secure, the joy in Germany should comfort Americans. The fortunes of both economies are as tightly bound as ever. If German exporters are thriving, it means that someone out there in the world economy is still spending freely.

Leader: Fear of renewed recession in America is overblown; so is some of the optimism in the euro area

Housing Affordability: A Possible Good Omen

by Lawrence Yun, NAR Chief Economist

Amid all the media reports on how housing is still “in the tank,” one piece of news seemed to have escaped many of the pundits. Housing affordability could possibly reach an all-time high of near 200 in the second half of this year. That is, a household making the median income would have twice the income necessary to buy a median-priced home in America. To date, NAR’s housing affordability index reached an all-time high of 184 back in early 2009. It was only slightly above 100 during the housing bubble years, meaning that qualifying income barely met the requirements to buy a home even with a 20 percent down payment (if not using teaser-rate, funny/toxic mortgages). Historically over the past 40 years, the average affordability index was 118.

The principal reason for the expected record high housing affordability index reading is the rock bottom mortgage rates of 4.4 percent on a 30-year fixed rate. Add to that modest gains in the average wage rate, which rose 3 percent in 2009 and is up 1.2 percent this year-to-date in spite of the high unemployment rate. Consider now versus then when home prices were at their “bubble” peak in 2006.

Of course, like all things “real estate,” affordability is local as well. There will be considerable local market variations in affordability conditions. Remember that one of the main components of NAR’s affordability index is home prices. Some markets encountered only minimal price declines while others
such as Las Vegas experienced a 60 percent nose dive. Still, on a nationwide basis, the affordability conditions have risen to compelling levels.

However, if a sizable number of people view – rightly or wrongly – that home prices will fall further and raise the affordability levels to even higher levels, then homebuying will continue to remain soft. That will lead to a further build up of inventory and thus hold back a true price recovery. The price decline potential was evident in July’s housing data. Existing-home sales plunged 27 percent to 3.83 million seasonally adjusted annualized units – their lowest level since 1995. Even though there was little change in inventory (with 4 million homes available for sale), the actual months’ supply of inventory rose sharply to 12.5. The sales decline reflected the aftermath of taking the stimulus medicine away. For nearly all of June, homebuyers knew they had to close the deal by the end of June to qualify for the tax credit. Therefore – and naturally – people rushed in to close in June and not wait till July. Qualitative REALTOR® member survey data about recent homebuyers suggest that investors, all-cash buyers, and buyers of expensive homes stayed in the market in July, but first-time buyers did not.

Going forward, home prices may fall, although I doubt in any meaningful way. Even if they do decline, there is no guarantee that affordability conditions will improve. Again, the principal reason for our current exceptionally high affordability conditions is lower mortgage rates. If prices were to fall 10 percent but mortgage rates creep up to 5.4 percent, then the affordability conditions could actually worsen.

As for home sales, there are far fewer people in the pipeline to buy a home in the immediate months after the tax credit expiration. Consequently, expect continuing low sales at least through autumn. But sales should slowly come back because of the high expected affordability conditions. Winter months are generally slow ones for home sales. If sales this coming winter matches up with past “normal” winters, then it would be a good sign that the housing market is getting back on track to normal sales levels. If sales this winter remain 20 to 30 percent lower than normal, then we are looking at trouble with high inventory stuck at a double-digit months’ supply. Remember that the months-supply figure is also impacted by the raw count of homes listed for sale. Since inventory generally declines from summer to winter, the months’ supply will steadily fall, hopefully to 8 or 9 months, and close to the level consistent with continuing price stabilization. For example, inventory fell by 600,000 to 800,000 from July to December in each of the past 3 years. If a similar decline occurs this year and home sales slowly bounce back to 4.5 million (annualized sales) then we can have continuing price stabilization.

A compelling argument can be made about the best affordability conditions, but it will be for naught if consumers lack confidence. Confidence in turn will be directly impacted by the general direction of the economy. Unfortunately, the economic recovery is coming to a virtual halt. GDP growth rates in the past three successive quarters were: 5.0%, 3.7%, and 1.6%. The upcoming GDP growth rates could be even lower figures. (If it turns negative for two straight quarters, then another fresh recession is at hand). At such tepid growth rate the unemployment rate could well reach 10 percent. GDP growth in a post-recessionary environment should be 5 percent or better, not only to start growing but to compensate for the recessionary downfall.

The weak economic expansion means that the job market will continue to look bleak and the unemployment rate could top 10 percent. This does not mean the country is necessary losing jobs on net right now. There have in fact been 763,000 private sector job creations from the beginning of the year to August. The soft economic expansion just means that the job creation pace is too slow to accommodate the rise in the labor force, particularly the recent high school and college graduates looking for work, aside from the need to fully re-hire the near 8 million job losses that occurred in the 2008 and 2009 recession. In a normal good year, there would be 2.5 to 3 million annual private sector job gains.

The homebuyer tax credit appears to have done its job in preventing home price over-correction. NAR prices show stabilizing pattern for the past 12 months while Case-Shiller price data show stabilizing patter for the past 18 months. We’ll still need to wait several more months to get a definitive gauge on price stabilization. At this point, we’ll see how the housing market behaves in the absence of the stimulus medicine. As with any sectors in the economy, it is very unhealthy to be dependent on government help for a long period. Compelling affordability conditions and some job creations are a move in the right direction and we have to just allow some time for these factors to work their way into the system. But an important question that will linger is of when consumer confidence will genuinely return to close on the deal.

For the latest economic forecast insights and analysis, visit http://www.realtor.org/research/economists_outlook.

2010 NAR Profile of International Home Buying Activity 

We live in a global marketplace. While all real estate is local, not all property buyers are. A significant share of home purchases are made by people whose primary residence is outside of the U.S. Find out which are the top five countries of origin for foreign home buyers and how these buyers are utilizing the services of REALTORS®.
Read full report > (636KB PDF)
View presentation > (2.46MB PPT)
Read news release>

Foreign Investment in U.S. Real Estate (2010)

This 15-page report covers foreign investment in U.S. real estate with a breakdown of the major countries with significant holdings. The report explains that prospects are good for continued healthy investment in U.S. real estate, given the strength of foreign currencies in relation to the U.S. dollar. An overview of today’s market and a forecast for the coming year are included.
Read full report > (761 PDF)

Housing Affordability: A Possible Good Omen

by Lawrence Yun, NAR Chief Economist

Amid all the media reports on how housing is still “in the tank,” one piece of news seemed to have escaped many of the pundits. Housing affordability could possibly reach an all-time high of near 200 in the second half of this year. That is, a household making the median income would have twice the income necessary to buy a median-priced home in America. To date, NAR’s housing affordability index reached an all-time high of 184 back in early 2009. It was only slightly above 100 during the housing bubble years, meaning that qualifying income barely met the requirements to buy a home even with a 20 percent down payment (if not using teaser-rate, funny/toxic mortgages). Historically over the past 40 years, the average affordability index was 118.

The principal reason for the expected record high housing affordability index reading is the rock bottom mortgage rates of 4.4 percent on a 30-year fixed rate. Add to that modest gains in the average wage rate, which rose 3 percent in 2009 and is up 1.2 percent this year-to-date in spite of the high unemployment rate. Consider now versus then when home prices were at their “bubble” peak in 2006.

Of course, like all things “real estate,” affordability is local as well. There will be considerable local market variations in affordability conditions. Remember that one of the main components of NAR’s affordability index is home prices. Some markets encountered only minimal price declines while others
such as Las Vegas experienced a 60 percent nose dive. Still, on a nationwide basis, the affordability conditions have risen to compelling levels.

However, if a sizable number of people view – rightly or wrongly – that home prices will fall further and raise the affordability levels to even higher levels, then homebuying will continue to remain soft. That will lead to a further build up of inventory and thus hold back a true price recovery. The price decline potential was evident in July’s housing data. Existing-home sales plunged 27 percent to 3.83 million seasonally adjusted annualized units – their lowest level since 1995. Even though there was little change in inventory (with 4 million homes available for sale), the actual months’ supply of inventory rose sharply to 12.5. The sales decline reflected the aftermath of taking the stimulus medicine away. For nearly all of June, homebuyers knew they had to close the deal by the end of June to qualify for the tax credit. Therefore – and naturally – people rushed in to close in June and not wait till July. Qualitative REALTOR® member survey data about recent homebuyers suggest that investors, all-cash buyers, and buyers of expensive homes stayed in the market in July, but first-time buyers did not.

Going forward, home prices may fall, although I doubt in any meaningful way. Even if they do decline, there is no guarantee that affordability conditions will improve. Again, the principal reason for our current exceptionally high affordability conditions is lower mortgage rates. If prices were to fall 10 percent but mortgage rates creep up to 5.4 percent, then the affordability conditions could actually worsen.

As for home sales, there are far fewer people in the pipeline to buy a home in the immediate months after the tax credit expiration. Consequently, expect continuing low sales at least through autumn. But sales should slowly come back because of the high expected affordability conditions. Winter months are generally slow ones for home sales. If sales this coming winter matches up with past “normal” winters, then it would be a good sign that the housing market is getting back on track to normal sales levels. If sales this winter remain 20 to 30 percent lower than normal, then we are looking at trouble with high inventory stuck at a double-digit months’ supply. Remember that the months-supply figure is also impacted by the raw count of homes listed for sale. Since inventory generally declines from summer to winter, the months’ supply will steadily fall, hopefully to 8 or 9 months, and close to the level consistent with continuing price stabilization. For example, inventory fell by 600,000 to 800,000 from July to December in each of the past 3 years. If a similar decline occurs this year and home sales slowly bounce back to 4.5 million (annualized sales) then we can have continuing price stabilization.

A compelling argument can be made about the best affordability conditions, but it will be for naught if consumers lack confidence. Confidence in turn will be directly impacted by the general direction of the economy. Unfortunately, the economic recovery is coming to a virtual halt. GDP growth rates in the past three successive quarters were: 5.0%, 3.7%, and 1.6%. The upcoming GDP growth rates could be even lower figures. (If it turns negative for two straight quarters, then another fresh recession is at hand). At such tepid growth rate the unemployment rate could well reach 10 percent. GDP growth in a post-recessionary environment should be 5 percent or better, not only to start growing but to compensate for the recessionary downfall.

The weak economic expansion means that the job market will continue to look bleak and the unemployment rate could top 10 percent. This does not mean the country is necessary losing jobs on net right now. There have in fact been 763,000 private sector job creations from the beginning of the year to August. The soft economic expansion just means that the job creation pace is too slow to accommodate the rise in the labor force, particularly the recent high school and college graduates looking for work, aside from the need to fully re-hire the near 8 million job losses that occurred in the 2008 and 2009 recession. In a normal good year, there would be 2.5 to 3 million annual private sector job gains.

The homebuyer tax credit appears to have done its job in preventing home price over-correction. NAR prices show stabilizing pattern for the past 12 months while Case-Shiller price data show stabilizing patter for the past 18 months. We’ll still need to wait several more months to get a definitive gauge on price stabilization. At this point, we’ll see how the housing market behaves in the absence of the stimulus medicine. As with any sectors in the economy, it is very unhealthy to be dependent on government help for a long period. Compelling affordability conditions and some job creations are a move in the right direction and we have to just allow some time for these factors to work their way into the system. But an important question that will linger is of when consumer confidence will genuinely return to close on the deal.

For the latest economic forecast insights and analysis, visit http://www.realtor.org/research/economists_outlook.

Architecture Coach: Ingredients for a Modern Kitchen

 

Woo buyers with the latest kitchen trends: less cabinet ornamentation, durable materials, energy-efficient and green appliances and lighting, and stylish glass backsplashes.
By Barbara Ballinger // | October 2010

 

The kitchen remains one of the most popular rooms in the house. If it’s well laid out and equipped, it becomes a magnet for family members. “It’s the place where they begin and end their days and also interact with friends,” says designer Cheryl Kees Clendenon, founder of In Detail, Kitchens, Baths, Interiors, a design firm in Pensacola, Fla.

But it can do more. “A home that’s in move-in condition (or better) is often at the top of today’s buyers’ wish list, and having a finely finished, open kitchen is among their highest priorities,” says Jennifer D. Ames with Coldwell Banker Residential Brokerage in Chicago. “What’s in style in kitchen design changes more often than hemlines, and buyers have minimal interest in buying a home with outdating rooms, whether they cook or not. A well-done kitchen absolutely can sway a buyer’s decision.”

Conversely, a poor design, dated appliances, high-maintenance materials, and an overly personalized palette can send buyers running, particularly since savvy shoppers know the cost to redo a kitchen keeps escalating. A major upscale remodeling now hovers near $112,000, according to Remodeling magazine’s latest Cost vs. Value Report.

But many kitchens don’t have to be gutted to work and look better. A few tweaks often can make it more enticing, such as:

  • An attractive manmade stone countertop in a new white-white
  • A luminescent glass-tiled focal wall
  • A floor tiled with 24-by-24-inch porcelain squares
  • Energy-efficient LED lamps in swank fixtures
  • One unique, valuable piece of equipment — for instance, a steam oven for speedier cooking and healthier eating

 

Your job is to help educate your buyers about the latest trends that make sense for their lifestyle and then for resale and to help sellers know which changes attract the widest group of buyers. Here are trends worth sharing:

Scaling Back
The turbulent economy is making more rethink ways of cutting back without sacrificing quality and style. Andrew Shore, president of Sea Pointe Construction in Irvine, Calif., suggests eliminating lights inside cabinets or using semicustom instead of fully custom cabinets. Mark L. Karas, president of the National Association of Kitchen and Bath Products and general manager of Adams Kitchens in Stoneham, Mass., says another way is to purchase a refrigerator that costs $2,000 instead of $6,000.

Low-Maintenance, Green Paints and Finishes
Whether it’s indoors on kitchen walls or outdoors on decks, finishes are going green as more manufacturers offer low- or no-VOC (volatile organic compounds) lines in a full spectrum of hues and sometimes faux finishes. Many also make them more durable and washable. Because the outdoor kitchen has become more sophisticated, companies like The Sherwin-Williams Co. are manufacturing decorative stains to embellish hardworking concrete patios, says Steve Revnew, vice president of product development.

Sustainable Products
With more communities mandating recycling and composting, it’s no surprise that the home trash compactor is morphing into a home compost system that gets taken out to a bin when full to be composed. Blanco’s “Salon” model gets integrated into the countertop to take up less space.

Contemporary Styling
While traditional style still reigns supreme overall, modern design is making inroads in the kitchen, says New York–based designer Florence Perchuk, who likes to mix the two. In cabinet design, simpler door styles such as Shaker appeal since they eschew ornate carvings, brackets, and rows of molding, says Jason Landau, owner of HYPERLINK “http://www.amazingspacesllc.com” Amazing Spaces in Briarcliff Manor, N.Y. To fit the cleaner look, hardware is slimmed down, says Chris Berry, of brooksBerry & Associates in St. Louis.

Almost Hands-Free
Almost hands-free for ease is another trend, thanks to motion-activated faucets (www.brizo.com) that simply require a light touch. There’s also lighting that comes on when you enter the room, says Berry.

Beyond Granite
Granite, which has become ubiquitous, is not as in demand as it once was. But interest in manmade, durable quartz counters has gone up. Among the most popular designs are white-whites with a thicker, two-and-one-half-inch built-up edge rather than the one-and-one-quarter-inch edge, says James Howard with Glen Alspaugh in St. Louis. While granite isn’t disappearing entirely, splashier hues and patterns are fading, says designer Leslie Hart-Davidson of Hart-Davidson Designs in Okemus, Mich. Replacements are honed and brushed granites, says Nancy Stanley of Kitchens by Design in Indianapolis.

White or Natural Cabinets
Painted woods, particularly white-painted maple, remain popular, but the shades veer toward a softer eggshell, ecru, butter cream, and vanilla. Some designers say glazing white cabinets will fade. Equally popular are cherry and maple cabinets stained medium to dark brown, says Barbara Umbenhauer, marketing manager at Rich Maid Kabinetry in Myerstown, Pa.

More Refrigeration
As an alternative to larger refrigerators, some companies offer models, often smaller and in drawers, to chill beverages away from the main unit in order to pare congestion, Shore says. Wine coolers, more popular than ever, can be recessed into walls for an integrated look.  Vinotemp’s “Portofino” uses thermoelectric technology to add another plus — greater energy efficiency.

Improved Cooking

Though they haven’t caught on with everyone, induction cooktops offer energy efficiency and the ability to heat contents but not cookware, Karas says. Thermador models come with a sensor that maintains a precise temperature and automatically shut off when done.

Zoned for Action

Besides separate cooking, prepping, cleaning, and eating stations, kid areas are flourishing, so children can grab drinks and snacks at pint-height cabinets, says Hart-Davidson. But adding certain stations doesn’t make sense, such as a desk zone that Berry says had become a “messy” center. She prefers a small smart-message center—with technology hidden behind cabinets — where home owners can watch TV or DVDs, look at digital photos, play music, retrieve recipes, and pay bills.

Better Clean-up

While sinks have never been among a kitchen’s most appealing components, a new generation is making home owners take note. Blanco’s MicroEdge is so thin that it’s flush with the countertop to make cleanup easier. If home owners want a second sink, it’s likely to be larger today for doing more cleanup and prep.

Mismatched Colors, Materials, Styles

The unmatched look of cabinets and countertops in different colors, materials, and styles continues, particularly in large kitchens where one choice can look monotonous. For high drama, Hart-Davidson suggests pairing colors from opposite sides of the color wheel such as red and green and combining styles as diverse as Scandinavian modern and Victorian.

Universal Design

Because of its potential to put everything within everyone’s reach, universal design is embraced more. Ovens can be set side-by-side rather than vertically, and microwave units can go under a cabinet rather than up high, Umbenhauer of RichMaid Kabinetry says.

Read More Architecture Coach Columns

Fannie, Freddie in the Home-Selling Business

Fannie Mae and Freddie Mac repossessed more than 191,000 homes during the first six months of 2010, twice as many as a year earlier.

The mortgage financiers must act carefully to avoid flooding the market with foreclosures, which tend to depress neighborhood home prices in the process.

As an alternative, Fannie Mae has launched a pilot “lease-and-hold” program in which foreclosures are rented rather than sold; the move could pose challenges, however, as the firm takes on the new role of property manager.

Source: The Wall Street Journal, Nick Timiraos (09/17/10)

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