Property more expensive than ever

A booming economy means buyers must pay higher prices for homes

By Pamela Reeves
Scripps Howard News Service
 

As the children return to school and the household falls back into a familiar busy pattern after the softer schedules of summer, you may be renewing a vow to get into a more commodious house or to buy something - anything - for the first time.
   Unfortunately, the booming economy has had a deleterious effect on the housing situation in many cities. People with buckets of money have driven up prices of the most expensive properties, and that has had a trickle-down effect on the rest of the market.
   Although home ownership in the United States is at a record high - 67.2 percent in the second quarter this year - many who aren't owners are having a harder time coping than ever.
   What can you do in such a situation?
  

Move. If it becomes clear you'll never find a house you can afford and you aren't happy renting, consider looking at other areas. If you can make the income-housing-school-commute pattern work better in another location, it's worth the trouble.
  

If moving isn't an option, get friendly with a good real estate agent, someone who knows the area intimately and can spot a bargain before it comes to market. Some agents specialize in distressed properties - from repossessions to tumble-downs. Depending on your skills and interests, such properties may be of interest and attainable.
  

Wait. The economy won't always be this hot. Prices do fall. A lot of government and private agencies are working to increase the stock of affordable housing. Get acquainted with local housing advocates to keep you up-to-date on what's happening.
   Homeowners affording
  extras after refinancing
   Wondering how your neighbors managed to go to Paris and buy a new car this year? Hint: Did they refinance? A survey by the mortgage firm Freddie Mac found that 83 percent of the people who refinanced in the second quarter this year took substantial cash out, too.
   The percentage of people taking a bigger mortgage when they refinance has been increasing since the beginning of 1999. Homeowners watching their houses soar in value are succumbing to temptation in high numbers.
   Remodeling boom bigger
  than originally estimated
   The Census Bureau, working with housing agencies, has revised its data on remodeling since 1984. The new figures show an even bigger boom in property improvements.
   The estimate for what homeowners spent on remodeling in 1999 is $142 billion. Twenty percent of that went to major replacements, 30 percent to maintenance and repairs, 29 percent to alterations, 11 percent to additions and 10 percent to outside additions and alterations, according to the National Association of Home Builders.
   "Many of our member remodeling companies are barely keeping up with the rush of homeowners over the last several years wanting to convert some of their equity into additional living space and new amenities for their homes," said Robert Mitchell, president of the builders association.
  

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