The real estate recession -- and how to plan for life after it -- were the topics of discussion Friday at Fresno State.
Richard K. Green, director of the real estate school at the University of Southern California, told real estate professionals that housing prices have hit bottom, but aren't likely to return soon to the peak levels of the real estate boom.
"If you're going to live in a place for five years, just buy it," Green said. "I don't see how we can get a big drop in price right now."
Green spoke at the Arnold and Dianne Gazarian Real Estate Center. He was joined by Arthur C. Danielian of Danielian Associates in Irvine, an architectural and land-use planning company that is helping to design the Loma Vista community centers in Clovis. Loma Vista, as proposed, includes a variety of commercial and residential development.
Green said prices have fallen to levels where a mortgage payment is nearly the same as rent; developers are running out of inventory and have to start building within two years (and the rebound will be fairly substantial); and interest rates aren't likely to increase much because the economic recovery still is fragile.
Still, Green issued some qualifiers that could mute his projections:
* Nationwide, 30% of all homeowners who carry a mortgage owe more on their homes than they are worth.
* There is a looming "shadow inventory" of foreclosures (the delinquency rate on Fannie Mae loans increased five-fold over the last 18 months), and joblessness is stubbornly high.
He called the foreclosure crisis "the big elephant in the room," but also noted that bank-owned properties are quickly being bought. "Maybe we'll be able to absorb them?" he said.
Families that are far under water and have job prospects in other states should consider walking away from their houses, he said. Finding work is a priority, although walking away in what people call a "strategic default" will likely lead to a black mark on credit.
"It's a pretty tough call," Green said.
While Green talked about when the housing recovery could occur, Danielian discussed what the post-recession period might look like architecturally. Stricter environmental regulations and greater densities will lead to more mixed-use projects where housing and commercial are together, and more energy-efficient and sustainable projects with such amenities as rooftop gardens and permeable concrete and brick pavers.
More families will be childless, households will be smaller, and new housing for those age 55 and older will be more common. One of the most interesting designs he showed was a triplex of two townhouses and a flat that resembled a rambling manor house. "Those would make a nice entrance to a community," he said.
He noted that community gardens, fruit trees and other forms of agriculture are becoming more popular among city planners. "Ag is the new golf," Danielian said.