Outdoor Living Spaces Becoming Greater

Americans are involved in a new "space race." According to the American Institute of Architects, Americans are making their outside spaces more and more elaborate - and more like their inside ones.

The outdoor living room trend is a wholesale repackaging of the typical patio/pool area into something much more elaborate and comfortable. It goes way beyond lounge chairs and barbecues. Outdoor living rooms often resemble plush, luxurious parlors. They feature not only cushiony furniture, they even have entertainment centers with built-in plasma screen televisions and hi-fi systems.

Builder Alon Barzilay, who is building two condo developments near Orlando that feature communal outdoor living rooms, says the trend has built from practically nothing five years ago to become an amenity of choice for the affluent.

"A few years ago," he says, "all you heard about was cocooning, people just wanted to retreat indoors; they were trapped in their houses. Now, everyone is into socialization and meeting the neighbors."

Read more about Americans' latest craze for making outdoors greater…

Slashed Prices Spur October Home Sales

Existing-home sales picked up slightly in October after home sellers slashed prices to create the largest year-over-year drop in median sale price in 40 years.

The National Association of Realtors says that sales of pre-owned homes increased last month by 0.5 percent.

The existing-homes sales report released this morning shows that Americans were buying homes at a seasonally adjusted annual pace of 6.24 million during October.

This is slightly more than the consensus estimate of economists (6.20 million), but the growth came at a price.

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Home Ownership - Are You Ready?

Home ownership means you no longer pay monthly rent for the roof over your head. Now you own it, and most of what's under it too. You can do what you want with your house (within reason of course). When you leave, you can sell it to recoup the purchase price and — with a little luck — earn a profit too.

But like most good things in life, home ownership comes with a list of disadvantages, responsibilities and downright headaches. In fact, it's probably the second biggest financial commitment most people ever make — the biggest being children. So before going any further, consider whether your lifestyle and finances make homebuying a smart move.

Let's start with lifestyle.  Except in a roaring real estate market, it usually doesn't make sense to buy a home you'll own for less than three or four years. Reason: the high transaction cost of buying and selling property means you could lose money on the deal. If you do make money on the deal, you'll pay capital gains taxes if you're in the house less than two years.

So ask yourself if you can really stay put for that long. Will you need to move because you are transferred by your current employer or a new one? Are you thinking of going back to school? Will your income remain steady or grow, or is it likely to decrease?

Some more mundane, but equally important, questions: Do you want to call the plumber and pay for his services every time a pipe leaks? Or would you rather leave it to the landlord to fix the plumbing, paint the walls, patch the roof and buy a new refrigerator? There's nothing wrong with that.

On the financial side, one key question is whether it costs more, on average, to rent or own in your area. If you want to calculate this out on your own, the rule of thumb is that if you pay 35 percent less in rent than you would for owning — including the monthly mortgage, property taxes and any homeowner's fees — then it's smarter to keep renting.

Ask your real estate or rental agent to help you figure out whether now is the right time for you to consider owning, instead of renting.

Pulling Cash From Your Home

Not long ago, a well-known economist surprised me by suggesting that it's a good time for homeowners to tap their equity to buy stocks.

Crazy, I thought. If you had risked your house to invest in the stock market before the dotcom crash, you could have lost everything.

But his idea got me thinking. For many of us, our house is our biggest cash reserve, and raiding that piggy bank made financial sense for years because interest rates were low and rising home prices kept replenishing the bank.

Now, with rates up and prices soft, is there any reason to tap your home equity?

Opening a home-equity line of credit is no longer a slam dunk for three reasons.

Housing Correction Has Further to Run

According to an updated forecast for 2007 released by a real estate industry group, the housing market correction has further to run, with new-home construction expected to fall another 12% next year.

While the market for existing homes will probably flatten out, the new-home market will probably continue to slow through next year, said David Lereah, chief economist for the National Association of Realtors.

Sales prices are expected to rise slightly. "Given the huge gains in home values during the housing boom, and this year's rise in housing inventory, overall price gains this year and next will be modest," Lereah said. Median existing-home prices are expected to rise 1.7% next year, while new-home prices are expected to rise 1.3%.

Housing starts will probably fall about 12% next year to 1.63 million after falling 11% this year, he said. Starts totaled 2.07 million in 2005.

Get the full story here…