The June issue of Dwell magazine featured an article on”Beach Houses We Love.”  I like many of them, love one or two, and don’t like a couple at all.  You can judge for yourself here.

Around a year ago we started marketing our beach homes as an alternative to the typical LBI house.  Where others build to the maximum allowable foot, we imagine a smaller, more sensible scale.  This isn’t a statement on large houses - some people need or want them, and that’s fine - as much as it is a statement on smaller ones.  Many people need and want smaller homes.  The fit their lifestyles better in many ways.  Everything from the amount of time you spend cleaning to the cost of smaller home is less.  At the same time, we feel strongly that there is a market for modern-ish, cool, green houses that look and feel great.  When you look around the Island, you mostly see one of three things: old homes that haven’t been renovated in 50 years, new homes made of vinyl and without any design quality, and very expensive, custom, architect-led homes.  For SquallCo, our goal is to develop comfortably modern homes at reasonable price points and sizes.  They are architect designed, but they aren’t entirely custom nor are they $2m.  They are, in many ways, similar to the sensibilities of the homes commonly covered by Dwell Magazine.  

Here are a few images of one the homes they reported on: 

I like this house.  It is warm.  It is modern.  It feels like a beach house, but not everyones’ beach house.  How about you?  What do you love in a beach house? 

Have photos or ideas?  Post them. I’d love to start a conversation.  

Here are a few basics for me:  real wood, lots of natural light, great and creative lighting, outdoor spaces that make you want to sit there all day or night, a year-round livability, color, crisp but natural lines.  I could go on. 

Over the course of the summer I will post photos of other beach homes I love.  You can do the same.  Reach out to me if you’d like to talk about how to take these ideas and them into reality as either a new home or a renovation.  

If it does, in fact, get more expensive for people to borrow for expensive homes because the government stops insuring these borrowers, I think it will ultimately be a good thing.  There will be a fair amount of pain in the short-term, and it really stinks for people that currently own homes that were federally insured.  It stinks because the value of their homes has been, in essence, propped up.  

Take that financial support away, and a $600,000 loan goes from costing $3,221 a month to $3,597 per month (jumping from 5% - 6%, as the article suggests).  Think of it another way, and it may seem even more significant.

To keep the same payment (around $3,220 a month) with the higher rate of 6% the mortgage amount would need to drop from $600k to $540,000 - a drop of $60,000 or so.  Now, assume that the buyer had put 5% down in both cases.  At a $600,000 value the value of the home was around $630,000.  In the new scenario, for a person with the same monthly budget, the corresponding value of the home would drop to around $567,000 - that’s over $60,000 - and a 10% drop in home values for people selling their home.  

So how could I say this is a good thing?  Well, in the sort-term it is certainly not, at least for the sellers, Realtors, and others whose take is tied to value.  However, over the longer term, once the value of the homes stabilizes, I do think that this approach serves to make homes more affordable and removes the government from at least one tier of mortgages.  Without the endless array of regulations regarding government-backed loans, the cost to borrow would increase, but (presumably) some of the mindless regulations currently in place may be reduced. 

Of course, thinking a step or two out, one might rightly wonder if this will lead to lenders on big ticket loans - without as many restrictions placed on them by the government - taking larger and larger risks and creating another toxic lending environment.  Sadly, that may well be the case, but we’ll have to see.

Short of that, I think that I think that this makes some sense.  How about you?

Also from Mesh Architecture http://www.mesh-arc.com/ — really nice renovation.  Love the modern and rustic combined.  Easy to do, affordable, and great looking.

Anyone else like this as much as I do?

meumoleskinedigital:

Courtyard House, Williamsburg - USA

by MESH Architectures

Steve Glenn, founder of Living Homes, talk about Prefab, sustainable design, and more.  If you’re interested in Prefab or wondering why it matters, he explains it very well.

Curious how a modular home gets built?  Check out this video.  

This past weekend I finished a book a friend suggested, “Confessions of an Economic Hit Man”.  In it the author, John Perkins, tells the story - mostly his own - of how the International Monetary Fund (IMF) and World Bank (and others) worked with and seemingly for Halliburton, MAIN (which is now defunct but was the company he worked for), and many other similar companies to load third world nations with debt that the lenders (The US, IMF, World Bank, etc.) knew would never be repaid.  These loans were made on the basis of what the author did for a living - wildly optimistic, some (he) would now argue fraudulent - projections of economic growth based upon the work they were lending for in the first place.  It was a very self fulfilling cycle for those involved, and it left messes all over the world.

Indonesia, for instance, would be projected to grow at say 30% a year for 20 years if they accepted the loans to then hire MAIN (or Halliburton or similar engineering firms) to build them infrastructure.  Typically this included bridges, roads, a larger electric grid, etc.  In almost all cases, according to Perkins, these projections were wildly creative.  His quick career advancement was based in large part to his ability to constantly deliver what everyone wanted: “research” to support that Indonesia, Panama, Iraq, _____, could pay back the loans once their nation had the necessary infrastructure in place.  In actuality the point wasn’t to build the nations as was claimed but for them to default on loans or at least be highly dependent upon further generosity by the institutions and the US.  In exchange the US got oil, political clout, control, access to cheap labor, tremendously large paydays for engineering companies like MAIN and Halliburton, and oil (yes, I know I already mentioned it).

I am not here to debate the validity of all of his points, many of which I missed, but the larger ones I certainly hit on.  It is a worthy read, an interesting layer on history, and, at least in my mind, at least partially and disturbingly accurate.  It is my personal sense that especially towards the end of the book the book loses steam and he gains it.  For me this is where it suffers a bit, but this is not meant as a book review.  

Regardless of how much credence you choose to give the book and argument, there are two fundamental points that are hard to miss: oil and debt.  In it we (the US) are hunting, among other things, for oil.  Our weapon of choice is debt.  The name, “Economic Hit Man”, alludes to this.  We used fancy titles to load countries up with debt to gain access to oil, the story goes.  That this debt led in many cases to civil unrest, a dramatic rise in the disparity between rich and poor word wide, and the rise of religious extremism and its nasty cousin terrorism seems pretty clear, and is argued well.  

For all the talk of a green movement now and the need for the US and other nations to be less dependent on oil economically, politically, and certainly environmentally, this book really drives home a point that sometimes gets lost.  There are incredibly effective, remarkably profitable, and long embedded forces in the world and especially our country that won’t let this happen.  The interdependency of the world’s economies is due to many things, but perhaps nothing as much as oil and debt.  Neither is going away anytime soon as I am sure that the tactics people in power are using are far more advanced then described.  This book was written mostly about events from the early 1970’s - 1992 or so.  Yet it is not dated. Much of what you read about daily has its roots in these events - especially in the Middle East.  

In reading the book and considering the implications of massive amounts of debt on people around the world that couldn’t afford it and never benefited from it, I also couldn’t help but think of the situation that the US and many other nations are going through right now.  At some level you have to wonder if these tactics that worked so well around the world weren’t applied - knowingly or not - by mortgage bankers and lenders in the US to folks in such remote places as Arizona, Florida, and Detroit.

Perhaps this is a stretch, but, honestly I don’t think it is.  The mortgage crisis in the US is a whole other story for another day, but as I read this book it was hard not to think that the EHM’s, as they were called, eventually set their sites closer to home.  

In housing there are two fundamental topics these days: green and debt.  Everyone wants their home to be more green (they should, US homes consume 40% or more of the US energy needs), and almost everyone is suffering from deflated housing values, foreclosures in their neighborhood or worse, and all of the inherent offshoots of these issues: an inability to move or relocate easily, lack of consumer confidence, high unemployment, etc.  ”Confessions of an Economic Hitman” isn’t about houses, and it isn’t about building more sustainable homes, but drawing connections isn’t hard at all. Our country, like Panama, Iraq, Indonesia, and many others got loaded up on way too much debt based upon projections for the future that never came to pass. At the same time, we are as dependent on oil, and in many ways I fear more, than ever.  There are a few bright spots in our nation and world’s movement to be less dependent on oil, and awareness is one of them.  Awareness, though, doesn’t change much.  

The reality is it isn’t all that hard to build very energy efficient homes.  People, builders, and architects can do it, if they try.  I, for one, am unaware of a more important place for people to make a difference in the environment.    As I said above, about 40% of American energy use is from homes.  In Germany, and even here in limited cases, Passive Houses are a reality.  Passive homes use very, very little energy.  They may not be for everyone, but the current standard should not be either.  What is the exact number? I don’t know.  What I do know is that almost all new houses have close to know real effort spent improving upon this, and that older homes are typically far worse.  If the average is 40% of energy use, what are the real energy hogs using?  What percentage are McMansions using?  How about homes that are 150 years old?  Wasted energy costs money, feeds pollution, contributes to the strengths of people and nations that you’d prefer not have it, and generally endangers the world.  

Our goal is to eventually get to net-zero energy for our homes.  Through proper insulation, solar as appropriate, and geo-thermal it can be done, and we will do it. You don’t have to build new to benefit from this.  For renovations of older homes the improvements that can be made are tangible and important, and the resources saved by not building new are significant and worthwhile.  If this is something that interests you let’s talk.

Incredible November day.

A few days ago architect Greg LaVardera wrote an interesting blog titled “Prefab is Dead” (it is worth noting that he is specifically discussing modern prefab).  You can read it here.  In it Greg argues many points that I agree entirely with. 

Among them: the cost of modern prefab isn’t as inexpensive as many people hope it to be, many builders are unfamiliar with - and unwilling to learn - modern construction for the site built part of the process, and that the “existing PreFab industry exhibited the same stylistic bias as site builders”.  These points are largely true, as are many others Greg makes.

Greg suggests that while prefab offered the hope of making modern design more accessible to anyone that wants it, ultimately, “… we still can’t visit our local home builder and choose our modern house. PreFab has not rushed to the rescue. And now PreFab is dead.”  He goes on to argue why the Swedish style of home construction, with wall panels, etc., created in a factory, offers greater hope and opportunity at making modern homes more accessible, affordable, and profitable for the builders.  Perhaps he is right, as I suggested at the top, you should read his post and judge for yourself.

Greg and I share a common frustration and goal and philosophy in many ways, and while I disagree with him that prefab is dead, the root of his thesis is one I share.  Modern, good, design can and should be more easily accessible to people that want it. 

Is this because I like modern design?  In part, sure it is.  I do prefer modern.  Mostly though, I like good, well thought out, inspired design that makes a space feel good to live, work, or play in.  Good design can be very traditional or incredibly modern. I can and do like both, but modern is my personal preference for sure.  Not the cold rigid modern that gives that style a bad name, but warm, livable, cool, modern design that just feels like the person living in it gets “it”.

Yet it also pure business. Time and again I notice people admiring modern architecture in person or on the cover of magazines.  I see them progressively buying more and more consumer products that are nothing if not modern: Apple products, the Mini Cooper, and countless others.  I hear people telling me how cool our houses are, and I see friends that live in traditional homes subscribing to Dwell after picking it up on my counter.  It is so obvious to me, and I assume to Greg, and many other around the industry, that there is a niche for modern design.  We know it to be true.

So, if we are right, if there is a market for modern design, where is it?  My personal thesis, and the one that guides the philosophy of our business approach, is that modern design must be made more accessible to people.  For most people the only way to get modern is to hire an architect, which is a leap of faith and can be costly, build a home, another leap of faith, and typically pay a premium for construction.  This takes time, money, and faith.  Most people don’t have all three.  Those that do tend to be wealthy.  So most good modern design is built for the wealthy.  That is fine.

It doesn’t mean that there isn’t a larger market for modern as much as it means the way the industry - especially architects - approaches the consumer is generally intimidating.  Where does prefab come in?  Why does it matter what Greg or I think?

We are both after the same goal - Greg offers modern house plans are very reasonable prices.  Other architects may scoff at this … all while they lament their lack of business and how the public doesn’t understand their designs.  SquallCo designs and builds PreFab homes that are modern and sustainable and at least 20% less expensive than stick built modern homes in our area.  Some architects and builders scoff at this too.  Is ours the perfect solution to design?  No, it’s not.  It would be great if people building a home took the time and spent the money to design and build custom architecture with a good architect.  I know I, and I am sure Greg, would be very happy to work with those clients as well.  We have a client now that we are doing custom prefab for, and it is very exciting. 

Our approach to PreFab is one of practicality and of frustration.  Frustration with the typical stick build process that is slow, inefficient, and wasteful.  Practical in its promise to put our more modern homes in a fair competition with stock builders.  It is clear that many, many people like modern.  It is equally clear that most of them end up in something else.  Mostly I view this as a failure of the industry to let the home buyer  know how to even get a modern home, and a failure for them to fairly articulate what it costs.  With our approach at least, this is not the case.  We currently offer two designed modern homes.  We are happy to do 100% custom design as well, but at least we offer this:  you know what the house looks like, you know what it costs, and you know you can have it in four or five months.  Can you say that about any other form of modern construction right now?  

The Swedish approach may be better now or in the future, and if so, I’ll be all over it.  Yet I’ve heard hundreds of people over the past few months tell me that, unlike many years ago, they have no issue with prefab.  Many, in fact, prefer it.  Is it perfect?  No.  What is?  Can we and other do better?  I hope so.  To me though Prefab is alive as anything given the fact that housing is on life support regardless of style or means of construction.  It still offers what it once did - the ability for people to get modern (or traditional, by the way) faster and less expensively than a traditional design and build approach; and the ability to remove the mystery of “how do I get that” from the buyer’s mind.  For us at least, that part - removing insecurity - is the most promising part.

Part of what I do is look closely at sales in a given area to better understand value and what is really selling, and at what price.  The other day I did just that for Beach Haven, NJ, and thought I would share the findings.  Here are the sales of single family homes in Beach Haven over the past 6 months. 

One of the things that stands out to me is the same thing that jumped out last time I did this, back in March.  While it seems that everything on the Island is big or bigger, a high percentage of homes sold are smaller - 1,500 ft or less.  For sure this is at least partially due to lower price points, but I think it also suggests that a good number of buyers want smaller homes.

It isn’t a coincidence that our smallest home is 1,250 sq. ft., nor is it shocking that more people call on it than our larger home.  There is a market for smaller homes.  The tricky part for us right now is that existing smaller homes have come way down in cost as compared to a few years ago.

This is a difficult truth to consider as a developer.  Given the cost of land (at least $450,000) you are lucky - very lucky - to be able to sell the smaller home (including land) in Beach Haven for less than $750,000 and make money.  People can purchase similarly sized homes for less, as you can see.  Does this mean we can’t develop the smaller home?  I don’t think it does, but it does give pause.  What do you think?  People complain all the time about how every home is too big.  Yet when you look at it closely the reasons become obvious why builders and developers build larger homes. 

Would you buy our home for $750,000 if you could buy an older one, in need of significant work, for, say $550,000 - $600,000?  Would you rather pay $900,000 for a larger home? 

It’s raining out today.  On Long Beach Island that almost always means at least some flooding.  If the tide happens to be high it can mean quite a bit of it.  It can make getting anywhere tough, and in some areas it can mean flooded backyards.  What it also means is that all kinds of stuff - from fertilizers to debris - will end up in the Bay.  To a certain extent this is to be expected and normal.  Yet typical development practices and terrible building codes go a long way to making this issue worse than it needs to be.  In the end this results in polluted waters high in nitrogen rich content that contributes to the destruction of the Bay and its ecology.

Back in April the Asbury Park Press did an article on this issue.  You can read it in full if you’d like, but here are a few quotes:

“Ecologically the bay continues to decline toward death,” deCamp said. “The problem is that everybody has been asking the ecological questions and leaving out the political ones. Why has our leadership allowed a generation of failure in protecting Barnegat Bay?”

And one of the ways to help fix the issue:

“Preserving more open space. Buying more public land, and reworking building rules so future development covers less acreage with pavement and buildings, help control stormwater runoff.”

I think that more than anything else on Long Beach Island the thing that drives me crazy the most are “backyards” that are completely covered in concrete.   Take a look at this arial image.  

Where is the grass?  Nearly all of the lots are either concrete or stone or both.  It looks terrible and is awful for the Bay.  Trees and grass are critical to a nice looking landscape and to the health of the environment.

Lots need to be water permeable so that when it rains water can do what it is supposed to - soak into the earth.   Instead - because people spending $850,000 (and way up) for a second home apparently can’t be bothered with a weed or landscaping - the water pours into the Bay, pulling all kinds of junk with it.

To be sure there are other issues at play, and the article linked to above does a good job of describing them.  Yet the easiest way to address this issue is to require water permeable lots for new construction. Pavers and other hardscaping materials can be purchased that are wholly water permeable.  Trees and grass and shrubbery help the natural ecological process and look great.   Yet local politicians talk about raising taxes or the Nuclear power plant, etc., to “fix” the Bay.  There are few issues that are so obviously the result of individual homeowners and buillders’ decisions, and the lack of political will to force a change in policy on this. 

I’ve said it before, but all SquallCo homes don’t just offer actual landscaping.  The open spaces are 100% water permeable.  A barrier island shouldn’t look like a concrete jungle from above.

A weeks ago Fred Wilson (@avc)posted this on his blog.  It got me to thinking.  And it kept me thinking.  I think that one of the most challenging things to do in a hyper-connected world is to manage your level of connections, and the frequency that you allow yourself to be distracted.  If you look at Fred’s blog archives you can see that for many years he posted daily with very few, if any, comments.  Then (I’m guessing this had something to do with Twitter), he started getting 150-200 comments on some days.  He is a blog star, but, like most success stories, it was a long time coming.

The premise of the video (you should watch it, it’s good) is that connected people and cultures have good ideas more frequently - and that those ideas flourish more often - than people that aren’t connected.  A genius sitting in a room keeping their ideas to themselves is far less likely to have a great idea than someone in a cafe, or bar, or blog, who is talking about their idea.  The world is complex and good ideas need many layers of iteration to make break through.  Typically it helps to share ideas, not keep them to yourself.

With Twitter and Facebook and texts and the list goes on there is a nearly constant connection to the outside world.  That can be good.  It promotes the same type of idea sharing (sometimes, anyway) that can lead to big ideas happening.  It is also problematic — many creative people and pychologists agree that breakthrough “aha” moments come in times of silence.  People have great ideas in the shower, on a run, or generally when they let their mind wander where it wants.   For fans of Mad Men and Don Draper this may bring back an exchange from last season [paraphrasing here]:

Peggy - “how do you come up with the ideas”

Don - “I don’t know”

Peggy - “I work so hard at them and struggle”

Don - “Stop”

Don - “think about it as much as you can.  And then, don’t.  Then you’ll have an idea”

That’s a very rough paraphrase (couldn’t find the actual exchange online), but the point remains.  Finding great ideas is a balance between connecting with people, working really hard, and taking your mind entirely off of things.  Lots of people do any one of these things well, but the trick, it seems, is finding the right balance.

This blog, as I’ve mentioned in the past, has two purposes - one is to give potential clients a better sense of our approach.  The other is to connect dots - ideas - with people.  One of the people that came to our event in July and is helping to exchange ideas was Ed Gorleski.  Ed is an architecture student at Drexel, and has stayed in touch.  He has started blogging and tweeting and networking online.  You can follow him @arkitecture (twitter) or on his Facebook page. 

How does this all come together?  Ed has taken an interest in us and our approach both on and off line, and it shows and I appreciate it.  The best marketing we can do is to find people that champion our cause, that connect dots.  That is social networking, and it can lead to the exchange of ideas, and that exchange of ideas can take you places you wouldn’t have been.

I met yesterday with Joy Luedtke of Luedtke Real Estate.  I called to introduce myself and to set up an appointment to drop off some marketing materials and chat.  Rather than wait, Joy said I should come right down.  So I did.

Clearly knowledgeable about the market and offering honest advice, it was one of the better meetings I’ve had in some time.  I was pleased to hear a few things. For one, Joy said she has many people specifically requesting modular options. That surprised me, as did the fact that some are ocean and bay-front owners.  She thought I should be more aggressive in marketing the modular aspect of the construction in our process, and it got me thinking.  I’ve certainly not been hiding from it, but I must admit that I’ve kept it as a secondary issue in our marketing.  I’ve perceived, perhaps incorrectly, that this aspect of our approach would be an issue with some folks - an issue I would prefer to discuss one-on-one.  I am starting to get the feeling that I was wrong about this, and that’s a good thing.  In nearly all of the conversations I’ve has with people over the past 2 months, I’ve been quite pleased to realize this about modular - most people don’t care, and some actively prefer it or think it’s cool.  Obviously I think they’re right, but this caught me off guard.  With magazine like Dwell regularly touting the advantages of off-site construction and the cool houses that can be built, I think the public is starting to get it.

Joy had some other good suggestions too, including about the homes themselves, and especially about marketing (which she is clearly good at). I very much welcome the input she offered.  

One of the reasons I blog here is to encourage that same feedback. This company and these homes are a conversation.  We will iterate and adjust and change, in large part due to things realized in meeting such as yesterday’s and comments from this blog and other places.  Obviously I can’t do everything people suggest - but I do listen.