Saturday, October 11, 2008

From Lust To Bust

You lusted after housing didn't you? You really didn't need that five-bedroom 3,000-square-foot corner lot, but you just had to have it because your lender threw you all the money you wanted. How's that mortgage interest rate reset doing? Feeling a little squeezed? Lust turned to dust? There's a cure for what ails you.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - Did you once spend vacation time staring into storefront windows at real estate listings?

Were home-for-sale websites at the top of your Web browser's bookmark list?

Did the names of hosts of house-and-home TV shows become household words in your home?

If you are sheepishly nodding "yes" to those questions, there's a good chance you may have been suffering from something called "house lust," a fetish-like preoccupation with everything real estate.

Now, of course, what you feel is the sting of piercing, withdrawal tension headaches -- a sort of housing hangover.

There is a remedy. It's not Excedrin, but it is a bitter pill to swallow.

The housing boom, now very much a bust, conjured up a level of lust for housing that became as American as apple pie, says Daniel McGinn, a Boston-based national correspondent for Newsweek.

He ought to know. He wrote the book on the subject. "House Lust: America's Obsession With Our Homes" (Random House, $24.95), was a real page turner in its day -- like, earlier this year.

Now, McGinn's book is probably your door stop -- if you haven't burned it. Not that the top selling tome isn't a good book. It is. And it warned you. Which is what earned it your scorn. You now envy those who paid attention as you were busy buying more home than you could afford. For you, the book is a haunting reminder of how manic you became.

McGinn's research indicates it wasn't just Washington D.C.'s slothfulness or Wall Street's greed, but also consumers' lust for housing that turned a booming housing market on its roof. The distinctly American addiction (though foreign investors also drooled) spawned a sort of realty gluttony that caused many buyers to overdose on house.

Easy mortgage money made it affordable for a consumer to carry a monkey on his or her back.

House lust pandemic

McGinn says instead of taking the practical roof-over-your-head approach to housing, too many American consumers become emotional infants about shelter. They schemed over, bellyached about and ogled homes they probably didn't need and often couldn't afford. And they lied. They lied about income, about jobs, about assets, and about their ability to repay.

House lust reached a fever pitch during the boom when supersized trophy homes, second, third and fourth homes, household-disrupting renovations, over bidding, and the fascination with real estate websites and TV programming reached "obscene" levels, says McGinn.

Even those with tenured careers rushed off and join the army of real estate agents.

McGinn, who explores the seven deadly sins of house lust in his book, conducted research during sleepovers in models homes, at real estate investment seminars and by obtaining his real estate license in a single weekend.

Here's what McGinn's research uncovered.

• Bigger was better. McGinn spent time with a couple who traded up in a series of houses that started at 2,000 square feet and ended with a $3 million 9,000 square foot McMansion that includes a men's hangout room and twin dishwashers. The couple complained the backyard was too small. Many such properties are now McEmpty.

• Virgin homes. McGinn uncovered an "ick factor," a cultural penchant for shiny, new things. People preferred an unsullied new home's smell rather than living in someone else's less expensive grit. The penchant helped fuel new home construction, and ultimately, a new sub market of apartment conversions.

• Voyeurism. Americans became both virtual and real life looky-loos who gathered intel on line from a growing number of data-based real estate web sites. They swarmed open house events with no intention of buying.

• Money grubbing. As long ago as 2002, real estate became the "psychological equivalent of gold" rather than just shelter. It was the dot com stock of the New Millennium. Many who'd just fled the dot com disaster sought financial refuge in residential real estate. Then the walls caved in.

Now, the party's over. Interest rates have ratcheted up. Balloon payments have popped. The stock market has collapsed. The feds are bailing out Wall Street. Blood flows down Main Street.

You can't afford lust.

From 1996 to 2006, the average annual household expenditures on housing rose nearly 65 percent. During the same period incomes fell far behind, rising only about 36 percent, according to a grim new report from the Center for Housing Policy, "Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters, 2008."

Chicken Little was right. What goes up often collides with falling sky.

Now, with the prospect of economic recession, the conversation has turned from hand-rubbing chatter to hushed talk peppered with words like "belt tightening," "frugal," "thrifty," and "economical" as former spendthrifts attempt reform.

Living without lust

There's no place like home -- if you still have one -- to change your squandering ways and save a bundle.

Just ask architect Sarah Nettleton and landscape historian Frank Morton.

They also wrote a book, but about the saner approach to shelter.

"The Simple Home: The Luxury of Enough" (Taunton Press/American Institute of Architects, $40) delves into the realm of simplicity with the idea that having "enough" is often much more than we really need.

You know, like lusting.

The key is, when we inspect our lives at home, we can often find areas where the simple life is a better, less expensive life. And boy do we need one of those right about now.

It doesn't matter where we live, what kind of home we have or how much it cost. If we make it simple, the savings will come.

Nettleton explains:

Enough already. A simple home offers the luxury of space in a world of clutter. When you identify your true tastes, throw out notions of what you think you should have, avoid excess clutter to maintain only the essentials, simplicity begins to set in. Sure, you need a place to eat, but does it really have to be a dining room addition?

Flexible use. Rooms can serve multiple purposes and help you get more out of what you already have. A breakfast nook can be a play area until a child ages. A kitchen can double as an art studio. Make a small screen porch more functional by installing a custom-sized table rather than going to the (likely empty) equity till again to enlarge the porch.

Thrift-minded simplicity. Fresh tomatoes from the garden taste better than greenhouse food. They'll also get you outdoors. Make a list of simple pleasures that delight but do not require expenditures for more stuff.

Timelessness. Avoid the attraction to "new" for "new's sake." Select a starting point for the feel of your home, edit your wish list down to one favorite image from a book or magazine. Trust your instincts. Your own style is authentic and timeless.

Sustainability. Gizmos don't create sustainability. You do. Find the balance between what you can afford and what you really need. A comfy window seat tucked into a window nook where you can curl up with a good book, can be as comfortable as a large custom leather sofa in an imposingly large rec room.

Resolve complexity. We all talk about disliking complexity in our lives, but can we walk the talk? Examine aspects of your home that prove troubling. Identify the real value of change. Is bigger really better? That new home's kitchen is darkened by the attached garage. What about a home without an attached garage? Is saving a few steps with the groceries really worth missing the morning sun beaming into your kitchen?

(Disclaimer: I, frankly, have not gotten over house lust. I dream of a newly built, masonry, commercial-style loft, with a California ocean view. An unstable structure built on unstable soil in an unstable seismic region. Pure lust. It would be an engineering marvel. But I have to have it. What's your dream home?)

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's news that really hits home!

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