03 December 2008

How will the recession hit the home channel?

Well, seems that we are officially in a recession -- and have been for about a year -- something that's not news to us in the home channel, from retail mom-and-pop hardware stores to large tract builders. But where do we go from here?

Leanne Tobias of GreenBiz.com thinks that the government can spend us out of the recession, and if the Feds are going shopping, might as well get them to buy green. I think that may be a help, sure, but compared to the billions and trillions of greenbacks being juggled and dropped all over Wall Street, I have to wonder if requiring the government to put Energy Star fridges and air conditioners in office buildings is really going to solve our problems.

Besides, what about housing?

If money is short and you always wanted to live in a hobbit-hole, there's a $5,000 option for you (photo, above right). This earth-sheltered house, designed by an artist in Wales, England, "was built with maximum regard for the environment and by reciprocation gives us a unique opportunity to live close to nature." All for about "1000-1500 man hours and £3000."

If you do not want to build-it-yourself, the optimism of the folks behind the $100K house is refreshing. This is an effort to create affordable green housing in urban Philadephia, and the brains behind the work, Nic Darling, sees reason to keep hope alive:
I may be crazy, overly optimistic or both, but I don’t think we are screwed. In fact, I think we are in one of the best positions possible at this time and place. The real estate market in Philly, while down, has remained fairly strong compared to the smoking craters that have replaced housing markets in many other parts of the country. It has been particularly good for houses selling under $300,000 and that is right in our wheelhouse. ... In addition, we have seen an increase in consumer knowledge regarding the real costs of home ownership. Maintenance, taxes and utilities have finally (we hope) become a part of a home buyer’s consideration. Rather than simply looking at the monthly payment, people are starting to consider the total expense of home ownership, and this bodes well for homes like ours. Our houses will require less maintenance, use half of the utilities (compared to a code built home) and offer a ten year tax abatement (can you say $75 a year in taxes?). They are simply less expensive homes to own. ... People also seem more and more willing to pay for green.

The 100K house may not be as elfin and fey as the 5K earth-sheltered house, but the former is LEED Platinum rated, and it features indoor plumbing and a bathroom, so it has that going for it. Which is nice.

But what about that recession? The conventional wisdom holds that luxury properties will still do well -- and my cousin, who sells and installs very high-end millwork in upstate New York, says he's doing okay. That seems to give anecdotal weight to what the conventionally wise think. To the extent that the wealthy also are looking for green products, there may well be a sweet spot there.

And if Nic Darling is on to something, there's another opportunity for affordable green housing, in addition to the high-end projects. I hope he's right.

1 comment:

Nic Darling said...

Thanks for the mention. As far as I understand things (which is never that far), you hit the nail on the head. The opportunity exists right now on the high and low end of the spectrum. According to my friends in real estate sales that means (in Philly) houses below $417,000 and above $1 Million are the only ones selling and the further above or below those numbers the better.

Also, while I thank you for the compliment, it would be dishonest of me not to point out that Chad Ludeman is probably the brains behind the 100k House. I am more of the mouth or the foot that goes in the mouth. I will, however, use that line to taunt him mercilessly and now that I've gotten that honesty thing out of the way, feel free to continue referring to me as the brains.