Breaking News from the New York Times

“A word to the wise: The great Los Angeles housing boom is over. The real estate price explosion in southern California, which sparked a national boom still continuing elsewhere, has stopped. The bubble that everyone said could never burst has burst. All over Los Angeles and Orange County, home buyers can buy a property for less than it would have cost a year ago, although there are exceptions. Buyers who can pay cash can almost steal houses and real estate. The days when ordinary citizens got rich from buying houses are gone, at least for the time being and at least in southern California. But what a bubble it was. ”

Did I mention that this article was originally published August 17, 1981. That’s more than a quarter century ago! Bet you wish you bought then!

More snippits from the article:

“The boom went on for such a long time because the economics were right. . . .Figure it out: mortgages were less than 10 percent for almost all of that decade, under 7 percent if you count the tax features, and houses were increasing in value all over the West Side of Los Angeles by a good 20 percent a year on a compounded basis. The banks, savings and loan institutions and and the economy generally were paying families to live in the better neighborhoods of Los Angeles. . . .This cheap credit fueled the takeoff of the boom. As prices rose to stratospheric levels, the price history itself fed the boom. . . .Even when mortgage interest rates shot up to 13 and 14 percent, the houses were still going up 20 percent a year, so who cared?”

Then the crisis came. The Fed took on inflation and interest rates hit 18%.

“Buyers became fewer and more choosy. Houses that once sold in a week stood unsold for a year. As demand fell, prices stopped rising, then began to fall. . . .Suddenly buyers decide to stay with their old houses and their rentals. Demand declines and prices slide a little more. Families who thought they were rich from their houses find that they simply cannot sell except at an immense discount. And the air goes out of the bubble. . . .”

“Of course, Los Angeles is still a desirable place to live, the economy is still relatively strong and no one seriously contemplates a major crash. And, of course, all bubbles, in every commodity, always end some time.”

So, it’s a buyers market again. What are you going to do about it?

Benjamin J. Stein’s entire article, “Housing Boom Goes Bust in Los Angeles,” was recently republished by the New York Times. It’s good to have perspective.

Contributed by Martha Amram 

Ah, Eichler homes — a truly California mix of indoor and outdoor living. But sometimes this comes at the price of dis-comfort. Many Eichler owners complain of being too hot in the summer as the sun bears down on their patio or atrium. And too cold in the winter as all that glass conducts the warm air out.

Typical home improvement suggestions to increase comfort are to add insulation in the walls and replace your single-pane windows with double-pane. Both will save energy, but lack an element of “fun” we crave. And the expense! Here are a few different ideas:

Close off the atrium or patio.

Some Eichlers wrap around their open courtyard. It’s a simple matter to add the final wall and some kind of roof covering. The roof area can be covered with an innovative skylight option. I’m a big fan of putting skylights over the atrium, because it makes the area useful during the rainy winter months, so we get more use out of the whole house. We installed a Rollamatic Roof. Our energy efficiency tests show that it doesn’t leak warm air at all. This means the glass windows facing the patio or atrium no longer conducts warm air to the outside, saving energy and money.

Oh, and the courtyard floor has now moved indoors. It can be heated with a simple add-on such as Warmfloor™. 

Add awnings for shade.

A recent study showed that shading windows on the south and west can substantially reduce air conditioning costs. While our air conditioning days are minimal, homeowners can increase comfort by shading windows and patio areas in the summer. East-facing patios, for example, can heat up in the morning and release that heat all day long, raising the house temperature in the afternoon when the sun is blazing down from the west.

Sale shades provide wonderful trapezoidal shapes for shade, a style that fits with the contemporary Eichler look. Sunset Magazine even recently featured an Eichler with a sail shade.

Add blinds to your single pane windows.

Cheaper than replacing all those famous Eichler windows with double-pane, blinds can help reduce heat gain in the summer and heat loss in the winter. Their effectiveness will depend on your lifestyle. Here are reasons that blinds may or may not work for you.

First, blinds reduce heat gain and heat loss when they are closed. But, as Eichler owners, we like our open indoor/outdoor feeling. So, blinds depend on the good habit of actually pulling them down. Will you really do it?

Second, blinds are an imperfect seal. They let hot air in, and cold air out. They will reduce heat transfer, but not as effectively as a double-paned window. Will you mind? If blinds are a solution for some of your windows, look for those that have R values (insulation factors) of 2 or more.

Match your choice of blind to your purpose. Some styles are optimized to save heat in the winter. Other styles are optimized to provide shade in the summer. There are even shading blinds that you can look through, keeping the best of both worlds — Eichler’s feel of outdoor living while cooling the house in the summer.

I love living in my Eichler, but I want to save energy too. Let’s keep looking for fun ways increase comfort.

Martha Amram is the CEO of GreenNow USA, a Palo Alto-based firm that helps homeowners save energy and water. During the home visit, GreenNow collects data and performs tests that help homeowners identify where their water and energy spending is going, how much is wasted, and the next steps to energy and water efficiency – from good habits to new appliances to home improvements.

Copyright © 2007. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ValueAndComfort.comthen the material has been stolen without permission. Violators will be reported.

The little cul-de-sac of Stardust Lane may have been named for the composer of a famous song. The court containing 14 houses was developed as part of the Carmichael Estates, named for the builder. 634 Stardust Lane, Los Altos, just went on the market, and the current owner calls it “The Carmichael House,” saying that builder lived in for a time. The composer of the song Stardust was Hoagy Carmichael.

A former long-time resident on the street who is very familiar with local history insists that there is no familial connection between the two Carmichaels. However, the homes were built in 1957. That same year, the Billy Ward and His Dominoes version of the song was #13 on the charts and the better-known rendition by Nat King Cole charted #24. Coincidence? I think not.

The song “Stardust” was originally written as “Star Dust” in 1929 with words by Michell Parish and music by Hoagy Carmichael. It was most recently popularized by Natalie Cole as the title track of her 1996 CD. Through the years, it was also charted by Bing Crosby, Louis Armstrong, Benny Goodman,Tommy Dorsey, Glenn Miller, Frank Sinatra, and others.

A prolific songwriter, some of Hoagy’s other most famous tunes include “The Nearness of You,” recently recorded by Nora Jones, and “Georgia On My Mind.”

My parents’ first home was an Eichler in Sunnyvale and while they complained of the draftiness, I have fond memories of the sun streaming through the large windows.  These large single-pane windows, however, were not exactly energy-efficient, but then again nobody really worried about heating bills back then. 

In the era of $3.50/gallon gas, energy efficiency suddenly becomes a big issue, especially for the 2700 Palo Altans who live in an Eichler. Palo Alto Weekly recently had a great article on improving energy efficiency in Eichler homes.

I think this article may be even more valuable for Eichler homeowners outside of Palo Alto, since PG&E rates are greater than those of Palo Alto’s municipal utility. There are Eichlers up and down the Peninsula from San Francisco to Santa Jose, including 20 in tony Atherton.

Is there an Eichler tract in your city? (Say “yes” if you’re in San Francisco, Burlingame, San Mateo, Foster City, Menlo Park, Los Altos, Mountain View, Sunnyvale, Santa Clara, Cupertino, Saratoga, or San Jose. Wow!). By the way, Mike Ahern has mapped out many Eichler tracts in Santa Clara County. It inspired me to tour some of the Eichler neighborhoods I didn’t know about.

Palo Alto is definitely Eichler central, with 2,700 of the 11,000 built. We even have two neighborhoods (Green Meadow and Green Gables) in the National Register of Historic Places specifically because Joe Eichler built his modern suburban tracts here.

Do you have any interest in history or architecture? Check out PA Eichler tracts in other neighborhoods: Adobe Meadow/Meadow Park , Charleston Meadows, Community Center, Fairmeadow, Midtown, Palo Verde, South of Midtown, and Triple El.