For entertainment purposes only
House lust lives on, too, at cable network HGTV. But it doesn't look the same as it did circa 2003, says Kathleen Finch, the general manager of the channel devoted to real estate, remodeling and renovations.
"People still love their homes, but they love them for different reasons, and our programming reflects that," Fitch says.
Her audience now is more likely to want an escape than a game plan for flipping rundown bungalows as an investment. Even in the worst of the downturn, ratings grew for "voyeuristic outlets" like "Million Dollar Room," Finch says.
Recently, though, to her surprise, some of HGTV's fastest-growing shows center on homeowners finding and transforming fixer-uppers to live in.
Diane, who wanted only her first name used, is afflicted with today's sadder-but-wiser kind of house lust. She's a newly minted physician in the Seattle area. Her husband is a technology professional. Both are in their late 30s. While friends were buying homes and starting families, she was in medical school, postponing nesting. Now, with their first child due, it's hard for them to think about much else.
But they can't yet buy what Diane wants: a great home for now and forever. She wants a good neighborhood, a manageable commute, great schools, playgrounds and lots of playmates for their yet-to-be born children. And most importantly, she wants permanence. She's done enough moving.
"I know I am a house snob," she says. "We dream of Wolf ranges and a remodeled Craftsman with an open kitchen. We want a master bedroom with a master bath. I look at houses on RedFin and the ones I like I think, 'Oh, I would love to live there.' But they're like $700,000 or $800,000."
Their $300,000 to $350,000 budget would buy a small, maybe slightly funky foothold in one of the desirable neighborhoods in the city's heart. In theory, Diane loves the idea of a fixer-upper with great bones. In reality, neither she nor her husband is handy and both are dog-tired in the evenings after commuting to and from demanding jobs.
Lusting for something new
"Fixers" have diminished in popularity in her market, says Grand Rapids, Mich., real-estate agent Pat Vredevoogd Combs. Young buyers often demand new homes or ones that have been recently remodeled. A pair of recent clients, for instance, wanted to see nothing built before 2003.
"We are still having a little bit of trouble selling the houses that are older, built in the '80s and '90s, and don't have all the cathedral ceilings and the fancy master baths but are so well constructed," Combs says.
This emphasis on newer construction by first-time buyers can seem overblown. TV and magazines have upgraded all of our expectations, of course. But there are also solid reasons for wanting a turnkey home. For one, it's tough to find cash for remodeling.
"It's hard enough to get a loan in today's marketplace with all the regulations there are, and that has put a little bit of a crimp into people being able to buy and redo," says Combs.
For another, remodeling costs are unpredictable. "Don't buy a to-do. Buy new," a savvy homebuilders' industry group ad campaign urges buyers. Amateurs like Diane realize that they run the risk of spending more on improvements than it might cost to buy an upgraded home.
Diane worries, too, that home prices might fall again, or stagnate, locking them indefinitely into a starter home they don't like. She has friends who are stuck in homes they've outgrown but can't sell because the mortgage is underwater.
Uncertainty lingers
It feels like the clock is ticking on their decision, Diane says. They should probably just compromise and buy a small home before they're priced out of the market, she says. But with the economy still shaky and evidence everywhere of what can go wrong, uncertainty makes it hard to act. Instead, she window-shops online. She scours listings and pores over a "rent versus buy" system she's devised to compare monthly mortgage costs of her favorite listings with the prices of comparable rentals on Craigslist.
Economist Yun thinks that rising home prices eventually will push fence-sitters like Diane and Daphne into making a purchase. With low prices and "unimaginably low" interest rates, this may be a "once-in-a-lifetime opportunity" for buyers, he says.
But Diane is unwilling to hopscotch from home to home. She's used to delaying gratification to achieve her dreams. They'll try holding out for a couple more years, to save a 20% down payment on a $400,000-to-$500,000 home, she says. "It is tempting," she adds, "to try to save even a few more years for that almost-attainable dream home."
